Behind the Scenes, McKinsey Guided Companies at the Center of the Opioid Crisis

In 2017, less than two years later, the FDA took a rare step of demanding that Endo pull Opana from the market, citing the grave public health consequences of its abuse. The company complied.

Over the past five years the appearance of the blood-disease cluster in Tennessee’s drug withdrawal from the market, the painkiller had brought in more than $ 844 million in revenue, according to corporate filings.

In Indiana, law enforcement officials broke up a drug-trafficking ring in 2016. One man admitted receiving Opana in Detroit and selling it in bulk to a dealer. He was sentenced to six years in prison.

“Health care, the schools, the welfare department, the whole thing is crumbling because of drugs, drugs that you helped make available,” said the judge in the case, scolding him.

“You’re not responsible for all that, of course, but you did your part.”

In June 2017, Tom Latkovic rose to speak at a health care conference in Chicago sponsored by his employer, McKinsey.

“I started today by asking, ‘Why do we continue to prescribe, dispense, pay for opioid prescriptions to people that we know, or at least we could know, have an incredibly high propensity to abuse them?'”

Mr. Latkovic, a senior partner, was not a member of McKinsey’s pharmaceutical practice. Instead, his team focused on using data analysis tools to address complex health care problems, and it was increasingly homed on the opioid epidemic.

Credit …CSPAN

In the hopes of broadening this work, Mr. Latkovic told the audience, “We’re launching a new center focused on opioids and insights.”

The client list for the new venture came to include state governments, insurers and health systems. One of McKinsey’s more ambitious efforts was in Philadelphia, a city that had one of the highest death rates in the country with opioid overdoses.

In 2019, consultants spent nearly two months working with the city government, according to two people who were local officials at the time. Both praised McKinsey’s work, which came at no cost to the city but was later shelved after Covid-19.

Yet as Mr. Latkovic’s team tried to combat the opioid epidemic, the firm did not stop serving the company often blamed for sparking it, Purdue. And at least two occasions, the documents show, drafts made public by Mr. Latkovic’s team was given consultants for pharmaceutical clients to review. The purpose, as a manager in the pharmaceutical practice post, was to assess “whether it could create any waves on social media or from journalists that could be harmful to our pharma clients.”

As negative news coverage and lawsuits mount against Purdue, some of the consultants fretted internally that scrutiny might extend to McKinsey.

In 2019, around the time of the Philadelphia project, McKinsey decided to stop advising companies on opioids – after the firm’s 15-year relationship with Purdue became public as part of a court filing by the Massachusetts attorney general’s office. Since Mr. Latkovic’s 2017 speech, McKinsey had $ 7.8 million in fees from Purdue, the documents show.

The disclosure that McKinsey had advised Purdue led the debate within the firm. “We may not have done anything wrong, but we did ask ourselves what were the negative consequences of the work we were doing, and how could it be minimized?” one consultant wrote.

Dr. Ghatak, a driving force behind McKinsey’s work for Purdue and Endo, found himself in the spotlight. Much as he had done for pharmaceutical executives, he crafted talking points, this time for himself.

“Opioid crisis is horrible,” he wrote. “Acknowledgment that up front.” But by advising clients to develop products that would be more difficult to abuse, “We were working directly on a solution to a public health crisis, not a silver bullet but definitely a solution.”

In 2020, documents were released as part of a Purdue legal case that indicated that Dr. Ghatak and another consultant, Martin Elling, had discussed destroying records. McKinsey soon fired them.

The firm settled with the state attorneys general in early 2021.

Some of McKinsey’s former clients face potentially crushing damages in court. Purdue filed for bankruptcy protection in 2019, and Mallinckrodt did the same the following year. Johnson & Johnson had a private investment firm in its narcotics business and has settled a number of lawsuits related to its marketing of opioids, which the company said was a statement “appropriate and responsible.”

Endo has also floated the possibility of bankruptcy amid a wave of litigation over its marketing of opioids, especially Opana. The company said in a regulatory filing that it had received a subpoena in 2020 from the U.S. Attorney’s Office for the Western District of Virginia, which had previously pleaded guilty to Purdue executives. This time, according to Endo’s disclosure, the office wanted information on McKinsey.

Top illustration by Mark Weaver.

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