McKinsey has offered to pay drug companies rebates for OxyContin overdoses

Nov 28, 2020 Travel News

McKinsey has offered to pay drug companies rebates for OxyContin overdoses

When Purdue Pharma agreed last month to plead guilty to criminal charges involving OxyContin, the Justice Department noted the role an unidentified consulting firm had played in boosting sales of the addictive pain reliever even as public outrage was increasing because of the widespread overdoses.

Documents released last week in federal bankruptcy court in New York City show the adviser was McKinsey & Company, the world’s most prestigious consultancy. 160 pages include emails and slides revealing new details about McKinsey’s advice to the Sackler family, billionaire Purdue owners, and the company’s now notorious plan to ‘boost’ OxyContin sales at some point. where opioid abuse had already killed hundreds of thousands of Americans.

In a 2017 presentation, according to the records, which were filed in court on behalf of several state attorneys general, McKinsey presented several options to boost sales. One was to give Purdue distributors a discount for each overdose of OxyContin attributable to the pills they sold.

The presentation estimated how many corporate customers, including CVS and Anthem, could overdose. He predicted that in 2019, for example, 2,484 CVS clients would either have an overdose or an opioid use disorder. A rebate of $ 14,810 per “event” meant that Purdue would pay CVS $ 36.8 million that year.

CVS and Anthem were recently some of McKinsey’s biggest clients. Press officers for both companies said they never received a rebate from Purdue for customers who overdosed on OxyContin.

Although McKinsey was neither charged by the federal government nor prosecuted, he began to worry about the legal repercussions in 2018, according to the documents. After Massachusetts filed a lawsuit against Purdue, Martin Elling, an executive at McKinsey’s North American pharmaceutical practice, wrote to another senior partner, Arnab Ghatak: “It probably makes sense to have a quick conversation. with the risk committee to see if we should do anything “other than” eliminate all of our documents and emails. No suspicion, but as the going gets tough someone might turn to us.

Mr Ghatak, who also advised Purdue, responded, “Thanks for the warning. It will be fine. “

It is not known whether the company’s consultants destroyed any documents.

The two men were among McKinsey’s top consultants. Five years earlier, the documents show, they emailed colleagues about a meeting where McKinsey persuaded the Sacklers to aggressively market OxyContin.

The meeting “went very well – the room was only filled with family members, including senior statesman Dr Raymond,” Ghatak wrote, referring to Purdue co-founder, the doctor Raymond Sackler, who would die in 2017.

Mr. Elling agreed. “At the end of the meeting,” he wrote, “the results were perfectly clear to everyone and they gave resounding approval to move quickly.”

McKinsey’s plan was accepted, although Russell Gasdia, then Vice President of Sales and Marketing at Purdue, questioned the company’s approach, writing to Mr. Ghatak the day before the meeting to say that ‘he had real concerns “about the need to boost sales” of OxyContin.

Another Purdue executive, David Lundie, agreed with the strategy, however. Mr Lundie said the proposal would attract the attention of the Sackler family, according to the documents. It made.

In 2017, Purdue CEO Craig Landau wrote that the crisis was caused by “too many Rx written” at “too high a dose” and “for too long”. The drugs, he said, were prescribed “for conditions which often do not require them” by doctors who lacked “the required training in how to use them appropriately.”

When McKinsey was next called upon to “take down” the aggressive sales campaign, according to court documents, Mr Landau allegedly said it was something “we should have done five years ago.”

A McKinsey press secretary said on Wednesday the company “is cooperating fully with opioid investigations” and announced in 2019 that it “will not advise any clients in the world on specific opioid cases.”

In a statement last month, the Sacklers said family members “who have served on the Purdue board of directors have acted ethically and legally.”

McKinsey’s involvement in the opioid crisis came to light early last year, with the release of documents from Massachusetts, which is among states suing Purdue. These recordings show McKinsey was helping Purdue find a way to “counter the emotional messages of mothers of overdosed teens” of OxyContin.

On Tuesday, Purdue pleaded guilty to criminal charges, including fraud against federal health agencies and paying illegal bribes to doctors. The company also faces penalties of approximately $ 8.3 billion. As part of the settlement, members of the Sackler family will pay $ 225 million in civil penalties.

In a statement released after the settlement was announced in October, Purdue said it “deeply regrets and accepts responsibility” for misconduct involving its marketing of OxyContin.

The federal settlement with Purdue comes as states and municipalities demand compensation from opioid makers for helping fuel a health crisis that has killed more than 450,000 Americans since 1999. Purdue is now seeking bankruptcy protection , just like other manufacturers.

“It’s the banality of evil, MBA edition,” said Anand Giridharadas, a former McKinsey consultant who reviewed the documents, of the company’s work with Purdue. “They knew what was going on. And they found a way to look beyond, through him, around him, in order to answer the only questions that were close to their hearts: how to make the customer money and, when the walls close, how. protect.

Mr Giridharadas is a New York Times contributor who wrote a 2018 book that examined the power of elites, including those at McKinsey, to find out how they escape responsibility for social harm.

In recent years, McKinsey has drawn criticism and unwanted attention for its dealings around the world, including in authoritarian countries such as China, Russia and Saudi Arabia. Its business in South Africa was decimated after McKinsey worked with companies linked to a corruption scandal that led to the country’s president being ousted. In the United States, McKinsey has worked with Immigration and Customs Enforcement under President Trump’s leadership, suggesting ways to reduce spending on food and accommodation for detainees.

Documents released last week detail McKinsey’s work with Purdue dating back to 2008, the year after the drugmaker pleaded guilty to deceptive regulators. The Food and Drug Administration previously told Purdue that OxyContin would face sales restrictions and that doctors who prescribe it would require specialized training.

The Sackler family saw the rules as a threat and, joining McKinsey, hatched a plan to “band together” with other opioid makers to push back on them, according to an email. McKinsey prepared Purdue executives for a vital meeting ahead of an FDA advisory panel reviewing its proposed reformulation of OxyContin to make it less prone to abuse. The reformulation was put on the market in 2010.

McKinsey put together backgrounders that anticipated the questions Purdue would receive. A possible question: “Who at Purdue is personally responsible for these deaths?”

The proposed response: “We all feel responsible.”

Dr Richard Sackler, now patriarch of the family, was pleased with the preparations, writing to his daughter in an email from January 2009: “Marianna, I am writing to tell you how impressed I was with the preparation for the meeting. from the FDA. The method and process as well as the content were excellent and represented a major change from efforts like this in the past. “

Purdue’s FDA meeting appeared at least partially successful. Even to this day, the FDA has never required specialized training for prescribers of OxyContin, wrote state attorneys who filed the documents last week.