Companies Guided by McKinsey at the Center of the Opium Crisis

In 2017, less than two years later, the FDA took the rare step of ordering Endo to withdraw Opana from the market, citing the dire public health consequences of its abuse. The company has complied.

In the five years from the onset of the blood disease cluster in Tennessee until the drug was withdrawn from the market, the painkiller brought in more than $844 million in sales, according to company filings.

In Indiana, law enforcement officials busted a drug-trafficking ring in 2016. A man admitted to obtaining Opana in Detroit and selling it in bulk to a dealer. He was sentenced to six years in prison.

“The health care, the school, the welfare agency, everything is ruined because of drugs, the drugs you helped make ready,” scolded the judge in the case.

“Of course, you’re not responsible for all of that, but you did your part.”

In June 2017, Tom Latkovic spoke at a healthcare conference in Chicago sponsored by his employer, McKinsey.

“I start today by asking, ‘Why do we continue to prescribe, dispense, pay for opioid prescriptions to people we know, or at least we may know, tend to the tendency to abuse them is extremely high?'”

Mr. Latkovic, a senior partner, is not a member of McKinsey’s pharmacy practice. Instead, his team focuses on using data analytics tools to solve complex health care problems, and it’s increasingly encroaching on the opioid epidemic.


Hoping to expand this work, Mr. Latkovic told the audience, “We are establishing a new center that focuses on opioids and insights.”

The client list for the new venture includes state governments, insurance companies and health systems. One of McKinsey’s more ambitious endeavors is in Philadelphia, a city with one of the highest death rate in the country due to opioid overdose.

In 2019, the consultants spent nearly two months working with the city government, according to two local officials at the time. Both praised McKinsey’s work, which had no value to the city but was later scrapped after Covid-19.

However, as Mr Latkovic’s team tries to combat the opioid epidemic, the company has not stopped serving the company often blamed for sparking it, Purdue. And on at least two occasions, the documents show, manuscripts of publications prepared by Mr Latkovic’s team were given to consultants for review by pharmaceutical clients. The aim, one pharmacy practice manager wrote, was to assess “whether this could make any waves on social media or from journalists that could harm customers.” our Pharma products or not.”

As negative news broke and lawsuits against Purdue increased, some consultants worried internally that the scrutiny could extend to McKinsey.

In 2019, around the time of the Philadelphia project, McKinsey decided to stop advising companies on opioids — after the company’s 15-year relationship with Purdue was made public as part of its court filings. Massachusetts attorney general’s office. Since Mr Latkovic’s 2017 speech, McKinsey has collected $7.8 million in fees from Purdue, the documents show.

The revelation that McKinsey advised Purdue led to controversy within the company. “We may not have done anything wrong, but we asked ourselves what are the negative consequences of the work we are doing, and how can it be minimized?” wrote a consultant.

Dr. Ghatak, the driving force behind McKinsey’s work for Purdue and Endo, finds himself in the spotlight. Just as he did for pharmaceutical executives, he created talking points, this time for himself.

“The opioid crisis is terrible,” he wrote. “Admit it up front.” But by advising clients to develop products that are harder to abuse, “we are working directly on a solution to the public health crisis, not a silver bullet but certainly a silver bullet.” a solution”.

In 2020, documents released as part of a legal case in Purdue indicate that Dr Ghatak and another consultant, Martin Elling, discussed the matter. destroy records. McKinsey soon fired them.

The company settled with the state attorney general in early 2021 and the documents it transferred are stored in an archive administered by the University of California, San Francisco and Johns Hopkins University.

Several former McKinsey clients have faced potential damages in court. Purdue filed for bankruptcy protection in 2019, and Mallinckrodt did the same the following year. Johnson & Johnson previously sold its drug business to a private investment firm and has settled a number of lawsuits related to the marketing of opioids, which the company said in a statement was “appropriate” appropriate and responsible”.

Endo has also raised the possibility of bankruptcy amid a wave of litigation over the marketing of opioids, particularly Opana. The company said in a regulatory filing that it received a 2020 subpoena from the U.S. attorney’s office for the District of West Virginia, where in previous years it had received guilty pleas from executives. Purdue’s practice. This time, as revealed by Endo, the office wanted information about McKinsey.

Top illustrations by Mark Weaver.

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