McKinsey Points a Uncommon Apology for Its Position in OxyContin Gross sales
Given mounting pressure on its role in the opioid crisis, McKinsey has taken the unusual step of recognizing that its collaboration with Purdue Pharma has fallen short of its standards and praised a full internal review of its actions, including the possible destruction of documents.
Criticism of the world’s most prestigious consulting firm has increased since the New York Times reported last month that McKinsey was discussing ways for Purdue to “turbo-charge” sales of its drug OxyContin and suggesting overdose-related discounts to dealers to pay for the pills they sell. Lawmakers – both Democrats and Republicans – have called for McKinsey’s investigation, and a prominent doctor at the company said executives who knew about the work should step down.
Two senior McKinsey partners debated whether to delete records related to Purdue, following documents recently filed in connection with the drug manufacturer’s bankruptcy proceedings. McKinsey rarely acknowledges mistakes and has never before taken responsibility for helping Purdue sell more opioids despite hundreds of thousands of people abusing the addictive pain reliever. The company said it has stopped advising clients around the world in the opioid business and is working with “opioid-related investigations”.
“When we look back on our customer service during the opioid crisis, we find that we have not adequately recognized the epidemic in our communities or the dire impact of opioid abuse and addiction on millions of families across the country,” McKinsey said in a statement its website published on Saturday.
The company continued, “We have conducted a full review of the work in question, including the 2018 email exchange referring to the possible deletion of documents. We continue to work fully with the authorities investigating these matters. “
Purdue recently pleaded guilty to charges including fraud against federal health officials and illegal setbacks to doctors. McKinsey has not been charged or sued for its work with opioids, and there is no evidence that the rebate program has gone into effect.
A McKinsey spokesman said the discounts weren’t meant to increase sales. Any suggestion that McKinsey seeks to increase overdoses or abuse is bogus, the company said in its statement. “However, we recognize that we have a responsibility to consider the wider context and impact of our work. Our work for Purdue has not reached this standard. “
In a statement earlier this fall, Purdue said it “deeply regrets and accepts responsibility for the commercialization of OxyContin.”
From 1999 through last year, nearly 450,000 Americans died from opioid overdoses, according to the Centers for Disease Control and Prevention. When Purdue first introduced OxyContin, it was one of the most addicting prescription pain relievers on the market.
The new information has attracted some current and former McKinsey employees to comment.
Dr. Dina Marie Pitta, a doctor at McKinsey, wrote a widespread email to her colleagues late last month saying recent coverage made it clear that the company “needs to transform rather than reorganize.”
Dr. Pitta concluded, “Systems, not people, need to change to avoid future failures. However, the management concerned knew the great potential for damage and was complicit. That guide should take responsibility for their role, including stepping down from the company without a parachute pack upon departure. “
A former consultant turned his anger on the two senior partners The Times oversaw the work with Purdue – Martin Elling and Dr. Arnab Ghatak, a doctor – who helped drive OxyContin sales during the crisis, and after Massachusetts sued Purdue and part of its board members, exchanged emails about possible document cleanups.
“It seemed to me that by vigorously promoting this crime against humanity, it seemed to me that these senior advisors had almost created the dreaded deadly taint of the great McKinsey name,” said Eran Zimmerman, who was an associate with the firm from 2001-2003. wrote in an open letter he posted on LinkedIn.
McKinsey’s role in helping Purdue advance OxyContin has been severely reprimanded by lawmakers. Republican Senator Josh Hawley from Missouri last week sent a letter to Kevin Sneader, McKinsey’s global managing partner, asking the company to respond by December 15 if it would destroy the documents and provide additional information, including the money who deserved it for its work with Purdue.
“Given McKinsey’s potential active role in combating the opioid crisis, Congress needs to consider requiring consulting firms to report criminal activity or specific criminal penalties for advisors involved in federal crimes,” Hawley wrote.
Senator Brian Schatz, Democrat of Hawaii, wrote in a Twitter post shortly after the Times article in November that it was “essential that the next attorney general prosecute all these criminals.”
Phil Murphy, the Democratic governor of New Jersey, told reporters last month that McKinsey’s work with Purdue was “beyond the pale,” specifically suggesting that Purdue pharmacy companies like CVS pay discounts if their customers overdose on OxyContin. But he said McKinsey’s extensive work with the state would continue.
Mr. Elling and Dr. Ghatak did not respond to emails asking for comment. For years, Mr. Elling was based in New Jersey, where McKinsey has a large office serving the many pharmaceutical companies in the state, some of which are among McKinsey’s largest clients. But his profile page on McKinsey’s website for the past few days showed that he had moved to Bangkok. Thailand is a relatively small market for the company.
Dr. Ghatak, a senior partner at McKinsey since 2000 who has also worked in New Jersey, holds a degree in medicine from the University of Pennsylvania. At McKinsey, he wrote about the need to improve health care in developing countries.
After several widespread reports of McKinsey’s work with controversial clients around the world, including authoritarian governments, the company said it was taking steps to change the way in which it selected the projects it selected.
“There are still numerous investigations and lawsuits pending against the industry. One should not expect this to be the last time reference will be made to McKinsey’s work,” wrote several of McKinsey’s top executives, led by Liz Hilton Segel, executive director North American associate posted a memo to employees hours after The Times published its article in November.
“Although we cannot change the past, we can learn from it.”