Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
McKinsey is facing a criminal investigation in the US over its work for opioid manufacturers, piling new pressure on a firm that has paid almost $1bn to settle civil claims that its advice fed an epidemic of drug addiction.
Federal prosecutors are also probing whether the firm obstructed justice by its actions when concerns about the work were mounting, according to a person familiar with the investigation.
McKinsey has faced repeated claims that its work for Purdue Pharma, the maker of OxyContin, and other drug manufacturers contributed to the US opioid crisis by advising the companies on how to boost sales.
The firm has previously insisted that its advice was legal, but said it has revamped how it decides which clients to take on and has not done opioid-related work since 2019.
The firm also fired two partners who discussed deleting documents relating to their opioid work in emails that became public in 2020.
The US Department of Justice has been investigating McKinsey’s work for several years, according to the person, and a grand jury has now been set up in Virginia to hear evidence. The grand jury will ultimately decide if any criminal charges are to be brought.
Another McKinsey client, the now-bankrupt Endo International, said in a regulatory filing last month that the US attorney’s office for the western district of Virginia, which is part of the justice department, had twice subpoenaed “documents related to McKinsey & Company”, in 2020 and 2021.
The Wall Street Journal first reported the criminal probe and the existence of the grand jury on Wednesday. McKinsey and the DoJ declined to comment.
McKinsey has paid almost $1bn in settlements since 2021 with plaintiffs, including US states and local governments, seeking compensation for the costs of dealing with an epidemic of addiction.
The opioid crisis has claimed the lives of hundreds of thousands of Americans, with overdoses ranking as the leading cause of death among adults aged between 18 and 45 years old. In 2023, more than 112,000 Americans died of overdoses, a record high, according to the Centers for Disease Control and Prevention.
Credit: Source link
