McKinsey to pay $78 million in US opioid settlement with health plans

By Nate Raymond

(Reuters) – Consulting firm McKinsey & Co has agreed to pay $78 million to resolve claims by U.S. health insurers and benefit plans that it fueled an epidemic of opioid addiction through its work for drug companies including OxyContin maker Purdue Pharma.

The settlement was disclosed in papers filed on Friday in federal court in San Francisco. It marked the last in a series of settlements McKinsey has reached resolving lawsuits over the U.S. opioid epidemic.

Plaintiffs accused McKinsey, one of the leading global consulting firms, of contributing to the deadly drug crisis by helping drug manufacturers including Purdue Pharma design deceptive marketing plans and boost sales of painkillers.

McKinsey previously paid $641.5 million to resolve claims by state attorneys general and another $230 million to resolve claims by local governments. It has also settled cases by Native American tribes.

Friday’s class action settlement, which requires a judge’s approval, resolves claims by so-called third-party payers like insurers that provide health and welfare benefits.

Paul Geller, a lawyer for the plaintiffs, in a statement said the drug crisis was caused by an oversupply of dangerous addictive drugs, and the case aimed to “recover some of the money spent on the over-prescribed pills.”

McKinsey did not admit wrongdoing. In a statement, the firm said it continued to believe its past work was lawful. It also noted it had committed in 2019 to no longer advise clients on any opioid-related business.

Thousands of lawsuits have been filed by states, local governments and Native American tribes accusing drug companies of downplaying the risks of opioid painkillers, and distributors and pharmacies of ignoring red flags that they were being trafficked illegally.

The litigation has resulted in more than $50 billion in settlements with drugmakers, distributors and pharmacy chains.

Nearly 645,000 people died in the United States from overdoses involving opioids, both prescription and illicit, from 1999 to 2021, according to the U.S. Centers for Disease Control and Prevention.

The U.S. Supreme Court earlier this month heard a challenge by President Joe Biden’s administration to Purdue Pharma’s multi-billion-dollar bankruptcy settlement resolving related claims against the drugmaker.