NJ To See $16M In Settlement With Opioid Marketing Firm: AG

NEW JERSEY — New Jersey will receive about $16 million as part of a national settlement with a global firm that was under investigation for fueling the opioid epidemic, Attorney General Gurbir Grewal announced.

McKinsey & Company will pay $573 million to 47 states to resolve the investigation after they were accused of developing aggressive marketing strategies used by some of the nation’s largest opioid manufacturers, including Perdue Pharma, authorities said.

New Jersey, and the other states involved in the settlement, will use their portion of the settlement to combat the ongoing opioid crisis. In 2019, New Jersey launched a crackdown on opioid abuse that is ongoing.

The announcement comes two weeks after New Jersey settled its case against Insys Therapeutics founder John Kapoor for $5 million. Kapoor had been accused of orchestrating a scheme to boost sales of the company’s Subsys product.

“We are continuing to deliver on our promise to hold accountable the corporations and executives whose bad acts contributed to the opioid epidemic that has brought so much despair to our communities,” Grewal said. “With today’s settlement, McKinsey is paying much more than the money it made advising opioid manufacturers like Purdue Pharma on how to sell more of their addictive drugs. We look forward to making Purdue and other opioid manufacturers also pay to help New Jersey overcome and heal from the epidemic they unleashed.”

As part of the settlement, McKinsey must also prepare tens of thousands of internal documents that will be published online publicly that detail its work for Perdue Pharma and other opioid companies.

McKinsey also agreed to adopt a strict document retention plan; continue its investigation into allegations that two of its partners tried to destroy documents in response to investigations of Purdue Pharma; implement a strict ethics code that all partners must agree to each year; and stop advising companies on potentially dangerous Schedule II and III narcotics.

McKinsey was accused of selling ideas to Perdue Pharma from 2004 through 2019, which includes the time before and after Perdue’s 2007 guilty plea for felony misbranding, according to the complaint filed in the investigation.

Among other incidents, McKinsey was accused of laying out a plan to help Perdue significantly increase sales of high-volume OxyContin prescribers – some of whom were writing 25 times more prescriptions for OxyContin than their lower-volume counterparts, according to authorities. It also focused on Perdue’s messaging to sell higher, more lucrative dosages.

McKinsey encouraged Perdue to engage in senior level discussions with a pharmacy chain that scrutinized suspicious opioid orders, according to authorities.

They also told the company to encourage advocacy groups to push back against the implementation of dispensing limits; and to seek alternative methods of delivery, such as sending the opioids directly to patients’ homes, authorities said.

McKinsey continued to design and develop new ways for Purdue to increase its OxyContin sales well after the opioid epidemic had peaked, authorities said. They then played both ends of the epidemic by advising Purdue on the profit potential of manufacturing and marketing opioid rescue and treatment medications.

McKinsey also engaged in similar efforts with arge-scale opioid manufacturers as Johnson & Johnson and Endo, earning millions of dollars for designing and implementing marketing programs to help bolster their opioid sales, authorities said.

At the same time, McKinsey also consulted with governments and non-profit organizations working to abate the opioid epidemic, which “McKinsey’s own research showed was caused in large part by prescription opioids,” authorities said.

In 2020, Purdue pleaded guilty to three felonies related to conduct spanning a decade – from 2007 through 2017 – during which Purdue worked side-by-side with McKinsey to design and implement marketing campaigns to increase opioid sales, according to authorities.

New Jersey has filed lawsuits against both Purdue and the Sackler family members alleging that their push to flood the market with OxyContin and other opioid products – including the targeting of such vulnerable populations as the elderly and children -- was responsible for the opioid epidemic.

New Jersey’s claims against Purdue and the Sacklers are now part of a case pending in U.S. Bankruptcy Court for the Southern District of New York. The state said it continues to aggressively pursue its claims against Purdue and the Sacklers in that court.