McKinsey and Its Opioids Scandal

By Madison Weiss

In 2007, Purdue Pharmaceutical pleaded guilty to misbranding OxyContin.  The case against Purdue alleged the company downplayed the medication’s addictive properties.  That year, opioids were estimated to already be responsible for 6.1 deaths per 100,000 people, or over eighteen thousand people in the United States.  It was clear that opioids, including those legally prescribed, had a fatal impact on the country.  It looked like we might have turned a corner as Purdue was ordered to pay over $600,000,000.  This was one of the largest fines ever imposed in such a case, sending a message that this sort of behavior was not acceptable and would not be tolerated.  

Until it happened again.  

In 2020, Purdue pleaded guilty once more to improper marketing.  But this time, the company was not acting alone.  In the wake of the 2007 case, members of the Sackler family, who founded and owned Purdue, sought advice.  In 2009, the company hired McKinsey to advise them on how to move forward in the wake of the lawsuit.  Consequently, McKinsey directed them to increase their sales of OxyContin.  To do so, the management consultancy crafted strategies to focus on pharmacies, physicians, and individuals in a way that would later be referred to as “over-marketing and over-prescribing”.  

Strategies Targeting Pharmacies

One such method noted for its particular coldness is rebates.  McKinsey proposed Purdue make payments to distributors like CVS for every patient who became addicted to or overdosed on OxyContin.  This compensation would be offered as damages for the sale of this product, not to the patients, but to the pharmacies.  The payment represented the cost to keep it in the interest of both parties to continue high volumes of opioid sales.  The inherent worth of human lives never entered this equation to determine each “event”, the term used for an addiction or overdose, was worth exactly $14,810.  

This sort of calculus is common in business.  We trace this tendency back to the work of Milton Friedman, an economist who emphasized responsibility to shareholders above all else.  The sentiment behind this, as justified by academics like Stephen Bainbridge, is to avoid “indeterminate balancing standards”.  From this point of view, having one group to which companies must always be responsible ensures firms will always make the responsible choice.  The alternative would be an ability to shift responsibility to a particular group to justify making a particular choice.  In response, critics point out that just because a framework gives a consistent result does not mean the result is justified.  The thousands of lives lost due to McKinsey’s decision to emphasize Purdue’s bottom line over concern for the general public magnify this concern.  What’s more, the argument this was a responsible outcome seems like a smokescreen for a decision that was in all likelihood the result of akrasia prompted by greed.  Akrasia means acting against one’s moral principles through weakness of will.^[1]  To borrow the words of Tom Peters, McKinsey’s akrasia was an “insane push for profitability at all costs”.^[2]

Strategies Targeting Physicians

McKinsey showed the same disregard for the common good in its advice on how to approach physicians.  They began by profiling physicians, focusing on those who prescribed opioids either far more frequently or far less frequently than their counterparts.  Salespeople were then sent to these individuals to convince them to prescribe opioids more often.  

Frequent prescribers would be encouraged to prescribe “even more OxyContin, in higher doses, for longer times, to ever more patients”.  This push is estimated to have led to a tripling in sales revenue.  Infrequent prescribers would be persuaded the drug was in fact not as harmful as feared, in the hopes that downplaying associated risks would get reluctant physicians to begin prescribing more freely.  This latter tactic was dubbed “Sales Force Blitz”.  The name is ironically fitting, with “blitz” coming from the term “blitzkrieg”, meaning “a violent surprise offensive”.^[3]  

McKinsey surprised both physicians and the world by pushing a sales tactic that would cause considerable harm.  While not all consulting firms have the most stellar reputations, McKinsey was revered as one of the oldest, largest, and most prestigious consulting firms in the world.  For almost one hundred years, the company prided itself on the “McKinsey mystique”, or the idea partners would always act to “uphold absolute integrity”.^[4]  This reputation has attracted talent from some of the most prestigious universities, with McKinsey being the sixth most popular employer of graduates from the University of Pennsylvania.^[5]  Such status within the advising community created broad trust in McKinsey as a reputable actor.

H. J. N. Horsburgh identifies three types of trust:  innocent, guilty, and therapeutic.^[6]  Innocent trust is born of a lack of experience and duplicity.  When a person trusts innocently, it is because they do not know better.  On the other hand, guilty trust is born of carelessness.  When a person trusts guiltily, they would have identified the other party was acting wrongly if only they had bothered to connect the dots.  Therapeutic trust is distinct due to its intentionality.  It is a doxastic form of trust.  This means it justifies trust through belief.^[7]  In this case, the belief that giving trust promotes trustworthiness.  Any of these three lenses can potentially explain physician-consultant relationships with regards to opioids.  

In terms of innocent trust, a physician who was told by McKinsey representatives that OxyContin was safe and who herself was not a deceitful person likely would not have questioned such a claim.  By feeding lies to these physicians, McKinsey was effectively “trading on its reputation… to make the crisis worse”.^[8]  Yet to assume all physicians would have such a level of naivete is unrealistic.  As a country, we have a history of drug companies pushing false claims about medications to make a profit.  John Marshall describes America as “a proud nation of salespeople”.  He observes that as long as people blindly trust false claims, they allow sales representatives to take advantage of them as a “gullible consumer”.^[9]  Accordingly, trust in these representatives is guilty.  Such trust would not exist if physicians questioned the veracity of the claims made by sales representatives.  

Such a view is reinforced by Robert Hurley’s six elements of trustworthiness.^[10]  One of these elements is alignment of interests.  Profit and patient care are not always aligned and are sometimes, as in the case of opioid overprescribing, diametrically opposed.  If a physician knows this background and still takes the word of a sales representative, she is trusting guiltily.  Clearly, the representative cannot be completely trustworthy, and the physician’s trust therefore makes her worthy of blame.  Alternatively, therapeutic trust would assume she does recognize this misalignment of incentives.  In such a case, her trust acts as a tool.  By treating a representative as trustworthy, she would hope to inspire trustworthy behavior.  As a result, the representative would be to blame for betraying this trust.

This of course assumes that trust is the motivating force behind changes in physician prescribing behavior, which may be a naive assumption.  Trust is only a factor in this equation if a physician is using the advice of a representative to make an honest recommendation in a patient’s best interest.  But this may not be her goal.  She too can be swayed by the profitability of overprescribing.  Research estimates that “between August 2013 and December 2015, 375,255 opioid-related payments were made to 68,177 doctors. Upwards of $46 million paid out, none of which was for a physician conducting research.”^[11]  It is no coincidence the rise in synthetic opioid overdoses began in 2013,^[12] as physicians were paid to overlook the consequences of opioid overprescribing. 

An added layer to the complexities surrounding increased opioid prescribing is the idea of pain as the fifth vital sign.  This concept was born from a desire to get physicians to respect and address their patients’ pain, as well as a perception that pain was being undertreated.  From this perspective, overprescribing appears like an accidental overcorrection towards appropriately addressing pain.  While Purdue and McKinsey still evidently profited off this development, it is worth noting other factors at work.  It is possible McKinsey played a role in laying the groundwork behind pain as the fifth vital sign.  This idea originated in the Veterans’ Health Administration before being made a standard in 2001.^[13]  McKinsey has a partnership with the Department of Veterans’ Affairs.^[14]  Of course, we cannot conclude from this information alone McKinsey in any way encouraged this development, especially given the company does not regularly disclose the advice that it gives to clients^[15].  Yet this coincidence is noteworthy, particularly considering that pain as a vital sign is no longer recommended given the impact of the opioid crisis.^[16]

Strategies Targeting Patients

In addition to McKinsey’s influence on healthcare organizations and physicians, the company also directly targeted patients.  Representatives encouraged Purdue to create financial incentives for consumers to purchase OxyContin, such as opioid savings cards.^[17]  This consultancy strategy had a measurable impact on opioid use, with data showing savings cards increased the number of patients who took opioids for longer than ninety days by sixty percent.  According to the Massachusetts Department of Health, patients who take opioids for such a long period of time are thirty times more likely to die of an overdose.^[18]  Savings cards achieved McKinsey’s goal of raising purchases of opioids at a quantifiable and striking cost to society.  When this cost became evident, McKinsey worked to maintain sales by “helping Purdue find a way ‘to counter the emotional messages from mothers with teenagers that overdosed’ from OxyContin”.^[19]  

Legal Action Against McKinsey

As a result of McKinsey’s involvement in the opioid crisis, residents of Mingo County sued in a class action lawsuit.  Mingo county sits in West Virginia, where the death rate from opioids is nearly three times the national average.^[21]  Residents’ legal counsel gave eight causes of action for judicial intervention:  negligence, negligent misrepresentation, public nuisance, fraud and deceit, civil conspiracy, civil aiding and abetting, unjust enrichment, and intentional acts and omissions^[22].  These charges focus on McKinsey’s advisory role and the resulting increase in opioid addiction and overdose deaths.  The charges differ in how directly plaintiffs must prove McKinsey was culpable as an agent, as well as for what actions the company is held responsible for.  

Negligence occurs when a party breaches a duty of care, causing damages.^[23]  A duty of care is a requirement for an agent to reasonably avoid causing injury.^[24]  In this case, McKinsey acted to raise opioid sales, raising rates of addiction and death, and ultimately causing injury.  Negligent misrepresentation specifically refers to when an untrue claim is made, carelessly causing harm,^[25] which occurred when McKinsey representatives downplayed the potential for abuse to physicians.  Public nuisance refers to a crime that threatens the wellbeing of a community.^[26]  In locations like Mingo County, where approximately ninety-one out of every one hundred thousand residents died from opioid-related causes,^[27] action contributing to addiction clearly jeopardized the community.  Unjust enrichment describes one party benefitting at another’s expense in a way that is unethical,^[28] such as the profit McKinsey made by advising overprescribing.

Whereas these charges do not require the action be intentional, fraud and deceit requires misrepresentation of information happen knowingly.^[29]   Additionally, civil conspiracy occurs when two or more parties knowingly agree to act unlawfully to harm another,^[30] and civil aiding and abetting refers to this plan being acted upon.^[31]  These charges apply to the working relationship between McKinsey and Purdue, which had already been found guilty of committing federal crimes with regards to the opioid crisis.  An intentional act occurs when a party, acting purposefully, harms another,^[32] and an intentional omission occurs when a party unintentionally does not act, allowing harm to occur.^[33]  McKinsey can be said to have intentionally acted by advising Purdue.  They also can be seen as having committed an intentional omission by not having implemented measures to ensure patient safety.  Intention clearly plays an important role in these charges.  

Yet the question of intention is a complex one.  The legal definition of this term is “a design, resolve, or determination of the mind”.^[34]  This presents an issue, given that a person’s thoughts cannot be examined directly but must rather be reconstructed.  Simply asking an agent her intentions is not a satisfactory solution.  When McKinsey leadership puts out a statement saying, “any suggestion that our work sought to increase overdoses or misuse and worsen a public health crisis is wrong”,^[35] their incentive to lie about its intention is obvious.  

One way to resolve this issue is to focus on the aftermath of a decision to deduce the intention behind it.  There are various philosophical perspectives that link intention to outcome.  One of the earliest is Aristotle’s conception of moral responsibility, which is built on an “awareness of action and consequences”.^[36]  A second is Robert Bidinotto’s critique of the so-called “morality of good intentions”, where he argues for the necessity of considering evidence and logic over moral intuitions.^[37]  A third is Elizabeth Anscombe’s definition of intention as consisting of two parts: judgment and performance.^[38]  From this perspective, intention is not merely what someone wants to occur.  Rather, it is a combination of their ability to reason to a certain conclusion and their success in acting to bring that conclusion to bear.  

When asked about the role McKinsey played in the opioid crisis, a consultant responds, “we may not have done anything wrong, but did we ask ourselves what the negative consequences of the work we were doing was, and how it could be minimized?”.^[39]  This lack of judgment makes any claim to good intentions impossible.  Additionally, the ways in which McKinsey acted, or the company’s performance, clearly fueled addiction.  Some of these actions, like offering rebates for cases of addiction, also suggest that addiction was factored into judgment and written off as an appropriate cost of doing business.

Implications for Society

Framing this in terms of medical ethics, which upholds the tenets of non-maleficence and justice, this intention is clearly unethical.  One can argue McKinsey, as a consulting firm and not a group of physicians, should not be bound by this frame.  However, medical ethics is considered to encompass both “health care professionals and their organizations”.^[40]  By advising physicians, McKinsey made itself one of their organizations.  As a result, the company bound itself to their code of ethics, which McKinsey clearly breached.

This breach constitutes a debt that McKinsey owes to society.  The judicial system upheld this conclusion when, in response to the charges brought against McKinsey, the court approved a settlement for the company to pay over five hundred million dollars.  This money will be used to directly support affected communities, financing treatment like rehabilitation services.^[41]  Such services represent an important step in healing the trauma of the opioid crisis. 

Yet a settlement is typically considered to be a response to uncertainty of what the verdict would be if a case were brought to trial.^[42]  Given the strong evidence against McKinsey, it is worth questioning why residents of Mingo County would doubt their ability to win the case.  This draws our attention to just how involved McKinsey may have been in shaping the law.  The company has a history of lobbying groups to pass legislation beneficial to the consultancy.^[43]  Even more morally dubious is that McKinsey was advising the FDA at the same time it was advising Purdue.^[44]  This allowed it to weaken citizen protections and put itself at an unfair advantage in legal proceedings.  Additionally, by settling, McKinsey did not have to admit responsibility to any of the charges brought against it.  This outcome allows the company to keep its reputation.  As such, the cost to McKinsey is mostly financial, sending the worrying message that this management consultancy’s commodification of human lives really is just another business expense.

-x-

^[1] Steward, Helen.  “Akrasia”.  Routledge Encyclopedia of Philosophy, https://www.rep.routledge.com/articles/thematic/akrasia/v-1.

^[2] Peters, Tom.  “McKinsey’s work on opioid sales represents a new low”.  Financial Times, 15 February 2021, https://www.ft.com/content/82e98478-f099-44ac-b014-3f9b15fe6bc6.

^[3] Merriam-Webster.  “Blitzkrieg”.  https://www.merriam-webster.com/dictionary/blitzkrieg.

^[4] Edgecliffe-Johnson, Andrew et al.  “‘It needs to change its culture’: is McKinsey losing its mystique?”.  The Financial Times, 23 February 2021, https://www.ft.com/content/63f24181-aee0-49f4-9966-a447d79692f0.

^[5] Penn Career Services.  Undergraduate Class of 2018.  https://cdn.uconnectlabs.com/wp-content/uploads/sites/74/2019/08/2018_Undergraduate_Career_Plans_Survey_Report.pdf.

^[6] Horsburgh, H. J. N.  “The Ethics of Trust”.  The Philosophical Quarterly, October 1960, Vol. 10, No. 41, https://www.jstor.org/stable/2216409.

^[7] Lyons, Jack C.  “Doxastic and Nondoxastic Theories”.  Perception and Basic Beliefs, January 2009, pp. 20-36, https://doi.org/10.1093/acprof:oso/9780195373578.003.0002.

^[8] Hamby, Chris and Michael Forsythe.  “Behind the Scenes, McKinsey Guided Companies at the Center of the Opioid Crisis”.  The New York Times, 29 June 2022, https://www.nytimes.com/2022/06/29/business/mckinsey-opioid-crisis-opana.html.

^[9] Marshall, John.  “Why You See Such Weird Drug Commercials on TV All the Time”.  Thrillist, 23 March 2016, https://www.thrillist.com/health/nation/why-are-prescription-drug-advertisements-legal-in-america.

^[10] Willinger, Jeremy.  “Trust”.  Ethical Systems, https://www.ethicalsystems.org/trust/.

^[11] Hope by the Sea.  “Prescription Opioid Doctor Kickbacks”.  18 August 2017, https://www.hopebythesea.com/blog/prescription-opioid-doctor-kickbacks/.

^[12] Centers for Disease Control and Prevention.  “Understanding the Opioid Overdose Epidemic”.  1 June 2022, https://www.cdc.gov/opioids/basics/epidemic.html.

^[13] Physician’s Weekly.  “Is Pain Really The 5th Vital Sign?”.  28 October 2013, https://www.physiciansweekly.com/pain-5th-vital-sign.

^[14] Glynn, Melissa et al.  “Leading a transformation in the Department of Veterans Affairs”.  McKinsey & Company, 19 September 2019, https://www.mckinsey.com/industries/public-and-social-sector/our-insights/leading-a-transformation-in-the-department-of-veterans-affairs.

^[15] Bogdanich, Walt and Michael Forsythe.  “How We’ve Reported on the Secrets and Power of McKinsey & Company”.  The New York Times, 19 February 2019, https://www.nytimes.com/2019/02/19/reader-center/mckinsey-hedge-fund-reporting-investigation.html.

^[16] Anson, Pat.  “AMA Drops Pain as Vital Sign”.  Pain News Network, 16 June 2016, https://www.painnewsnetwork.org/stories/2016/6/16/ama-drops-pain-as-vital-sign.

^[17] Casey, Carolyn. “McKinsey Sued Over Consultative Role in OxyContin Promotion”.  Expert Institute, 5 April 2021, https://www.expertinstitute.com/resources/insights/mckinsey-sued-over-consultative-role-in-oxycontin-promotion/.

^[18] Willmsen, Christine.  “Suit: Patients Who Used Purdue’s Discount Cards Were More Likely To Get Hooked On OxyContin”.  WBUR, 1 February 2019, https://www.wbur.org/news/2019/02/01/purdue-oxycontin-savings-cards.

^[19] Bogdanich, Walt and Michael Forsythe.  “McKinsey Proposed Paying Pharmacy Companies Rebates for OxyContin Overdoses”.  The New York Times, 27 November 2020, https://www.nytimes.com/2020/11/27/business/mckinsey-purdue-oxycontin-opioids.html?fbclid=IwAR1xqN4Yy6SaDv41JXtxCmuLX8h55aE2ouiP9hKE000iPUXr-g-hCIE5Soo.

^[20] Bogdanich, Walt and Michael Forsythe.  “McKinsey Proposed Paying Pharmacy Companies Rebates for OxyContin Overdoses”.  The New York Times, 27 November 2020, https://www.nytimes.com/2020/11/27/business/mckinsey-purdue-oxycontin-opioids.html?fbclid=IwAR1xqN4Yy6SaDv41JXtxCmuLX8h55aE2ouiP9hKE000iPUXr-g-hCIE5Soo.

^[21] National Center for Drug Abuse Statistics.  “Opioid Epidemic: Addiction Statistics”.  https://drugabusestatistics.org/opioid-epidemic/#west-virginia.

^[22] UniCourt.  “The County Commission of Mingo County et al v. McKinsey & Company, Inc.”.  1 April 2021, https://unicourt.com/case/pc-db5-the-county-commission-of-mingo-county-et-al-v-mckinsey-company-inc-811793.

^[23] Johnstone & Gabhart LLP.  “West Virginia Comparative Negligence Laws”.  https://www.wvlaw.net/comparative-negligence-law/.

^[24] Suszek, Andrew.  “What is the ‘Duty of Care’ in Personal Injury Law?”.  AllLaw, https://www.alllaw.com/articles/nolo/personal-injury/duty-of-care.html.

^[25] LaMance, Ken.  “Negligent Misrepresentation Defenses”.  LegalMatch, 21 November 2018, https://www.legalmatch.com/law-library/article/negligent-misrepresentation-defenses.html.

^[26] Farlex.  “Public Nuisance”.  https://legal-dictionary.thefreedictionary.com/public+nuisance.

^[27] LiveStories.  “Mingo County Opioid Death Statistics”.  https://www.livestories.com/statistics/west-virginia/mingo-county-opioids-deaths-mortality.

^[28] Legal Dictionary.  “Unjust Enrichment”.  https://legaldictionary.net/unjust-enrichment/.

^[29] Berlik, Lee E.  “Fraud: What It Is, and What It Is Not”.  The Virginia Business Legislation Blog, 24 November 2009, https://www.virginiabusinesslitigationlawyer.com/fraud-what-it-is-and-what-it-i/.

^[30] FindLaw.  “Civil Conspiracy”.  20 June 2016, https://www.findlaw.com/smallbusiness/business-laws-and-regulations/civil-conspiracy.html.

^[31] CrowdSourceLawyers.  “Differences Between Civil and Criminal Aiding and Abetting”.  https://crowdsourcelawyers.com/criminal-law/aiding-and-abetting-2/.

^[32] Recht Law Offices.  “Intentional Acts”.  https://www.rechtlaw.com/personal-injury-lawyers/intentional-acts/.

^[33] USLegal.  “Intentional Omission Law and Legal Definition”.  https://definitions.uslegal.com/i/intentional-omission/.

^[34] TheLaw.com LLC.  “Intention”.  https://dictionary.thelaw.com/intention/.

^[35] McKinsey & Company.  “McKinsey statement on its past work with Purdue Pharma”.  5 December 2020, https://www.mckinsey.com/about-us/media/mckinsey-statement-on-its-past-work-with-purdue-pharma.

^[36] The Arthur W. Page Center.  “Ethical Principles of Responsibility and Accountability”. https://www.pagecentertraining.psu.edu/public-relations-ethics/ethics-in-crisis-management/lesson-1-prominent-ethical-issues-in-crisis-situations/ethical-principles-of-responsibility-and-accountability/.

^[37] Bidinotto, Robert James.  “The Morality of Good Intentions”.  Foundation for Economic Education, 1 March 1987, https://fee.org/articles/the-morality-of-good-intentions/.

^[38] Setiya, Kieran.  “Intention”.  Stanford Encyclopedia of Philosophy, 31 August 2009, https://plato.stanford.edu/entries/intention/.

^[39] Supra note eight.

^[40] Gillon, Raanan.  “Medical Ethics: Four Principles Plus Attention To Scope”.  British Medical Journal, 16 July 1994, Vol. 309, No. 6948, pp. 184-188, https://www.jstor.org/stable/29724194.

^[41] Randazzo, Sara and Jonathan Randles.  “McKinsey Agrees to $573 Million Settlement Over Opioid Advice”.  The Wall Street Journal, 3 February 2021, https://www.wsj.com/articles/mckinsey-agrees-to-573-million-settlement-over-opioid-advice-11612405236.

^[42] Douglas, Lisa.  “Why Do So Many Court Cases Settle Out of Court?”.  https://lisagdouglas.com/why-do-so-many-court-cases-settle-out-of-court/.

^[43] Supra note eight.

^[44] MacDougall, Ian.  “McKinsey Never Told the FDA It Was Working for Opioid Makers While Also Working for the Agency”.  ProPublica, 4 October 2021, https://www.propublica.org/article/mckinsey-never-told-the-fda-it-was-working-for-opioid-makers-while-also-working-for-the-agency.