Global consultancy firm McKinsey & Company has apologized for its work with OxyContin maker Purdue Pharma, amid mounting criticism about the firm’s role in the opioid crisis
McKinsey, considered the world’s most prestigious consulting firm, published a statement to its website Saturday acknowledging that its work with Purdue fell short of its own standards.
The company also vowed to conduct a full internal review ‘of the work in question’, including allegations that two senior partners, Martin Elling and Dr. Arnab Ghatak, sought to delete records related to the drug maker.
‘As we look back at our client service during the opioid crisis, we recognize that we did not adequately acknowledge the epidemic unfolding in our communities or the terrible impact of opioid abuse and addiction on millions of families across the country,’ McKinsey’s statement read.
‘We have been undertaking a full review of the work in question, including into the 2018 email exchange which referenced potential deletion of documents. We continue to cooperate fully with authorities investigating these matters.’
McKinsey & Company has apologized for its work with OxyContin maker Purdue Pharma
The company also vowed to conduct a full internal review of its actions, which includes allegations that two senior partners, Martin Elling (above) and Dr. Arnab Ghatak, sought to delete records related to Purdue
McKinsey, considered one of the world’s most prestigious consulting firms, published a statement to its website Saturday acknowledging that its work with Purdue fell short of its own standards
Criticism of McKinsey has escalated in the last month, following a New York Times report that claimed the company had advised members of the Sackler family, Purdue’s billionaire owners, on ways to ‘turbocharge’ sales of its highly-addictive drug, OxyContin.
As part of the discussions, McKinsey reportedly proposed Purdue paying distributors rebates for overdoses linked to the pills they sold.
Lawmakers on both sides of the political aisle have called for McKinsey to be investigated, and a prominent physician employed by the firm said executives who were aware of this work should resign.
Part of the controversy stems from allegations two senior partners are the firm, Elling and Ghatak, reportedly discussed whether to purge records pertaining to Purdue in 2018 after Massachusetts filed a lawsuit against the drug firm.
‘It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything [other than] eliminating all our documents and emails,’ Elling reportedly wrote to Ghatakin an email. ‘Suspect not but as things get tougher there someone might turn to us.’
Ghatak allegedly replied: ‘Thanks for the heads up. Will do.’
Both men had previously advised Purdue. It’s currently unclear whether any documents were actually destroyed.
Criticism of McKinsey has escalated in the last month after a report claimed the company had advised members of the Sackler family, Purdue’s billionaire owners, on ways to ‘turbocharge’ sales of its highly-addictive drug, OxyContin (Pictured above is some of the Sackler family: Dr Richard Sackler, standing second from left and Jonathan Sackler standing second from right. Seated is Raymond and Beverly Sackler)
Between 1999 and 2019, nearly 450,000 Americans reportedly died from overdoses involving opioids, according to the CDC (pictured: New York State Attorney General Letitia James holds a press conference in New York, in March, announcing a legal filing against the Sacklers)
HOW IS OXYCONTIN IMPLICATED IN THE US OPIOID CRISIS?
OxyContin is a prescription painkiller produced and sold by Purdue Pharma.
The drug is strong, addictive and was linked to thousands of overdose deaths in 2017.
Since OxyContin, a time-released opioid, was introduced in 1996, addiction and overdoses have surged.
In both 2017 and 2018, opioids were involved in more than 47,000 deaths, according to the US Centers for Disease Control and Prevention. In 1999, by comparison, there were fewer than 4,000 opioid overdose deaths.
Purdue’s drugs are just a slice of the opioids prescribed, but critics assign a lot of the blame to the company because it developed both the drug and an aggressive marketing strategy.
McKinsey’s apologetic statement is said to be a rare move for the firm, which seldom acknowledges its mishaps and has never before accepted responsibility in helping Purdue to sell more opioids, according to the Times.
‘Our work with Purdue was designed to support the legal prescription and use of opioids for patients with legitimate medical needs, and any suggestion that our work sought to increase overdoses or misuse and worsen a public health crisis is wrong,’ McKinsey’s statement read.
‘That said, we recognize that we have a responsibility to take into account the broader context and implications of the work that we do. Our work for Purdue fell short of that standard.’
Purdue recently pleaded guilty to criminal charges, including defrauding federal health agencies and paying illegal kickbacks to doctors. It also agreed to an $8.3billion civil settlement with the US Department of Justice related to claims about its role in the national opioid addiction and overdose crisis.
As part of the deal, Purdue will pay the federal government $225million, with the rest being part of a planned settlement between the company and thousands of state and local governments and other entities that are suing it.
Another $225million will be paid out directly by the Sackler family, for the alleged conduct of board members Dr Richard Sackler, David Sackler, Mortimer D.A. Sackler, Dr Kathe Sackler, and Jonathan Sackler, the DOJ said.
McKinsey, meanwhile, has not been charged or sued for its work with Purdue, and there is no evidence to indicate the suggested rebate scheme was ever put into practice.
A spokesperson for McKinsey told the Times that the suggested rebates were not intended to enhance sales.
McKinsey has not been charged or sued for its work with Purdue, and there is no evidence to indicate the suggested rebate scheme was ever put into practice (McKinsey’s New York City office at the 3 World Trade Center is shown above)
Between 1999 and 2019, nearly 450,000 Americans died from overdoses involving opioids, according to the CDC.
The latest disclosures regarding McKinsey and Purdue have reportedly caused a number of current and former employees of the consultancy firm to speak out, the Times reported.
A physician at McKinsey, Dr. Dina Marie Pitta, is said to have written in an email to colleagues last month that recent news coverage made it clear the firm ‘needs to transform, rather than remediate.’
McKinsey’s apologetic statement is said to be a rare move for the firm, which seldom acknowledges its mishaps and has never before accepted responsibility in helping Purdue to sell more opioids
‘Systems, not people, must change to avoid future failures, yet the leadership involved knew the great potential for harm and were complicit,’ Pitta continued. ‘This leadership should take accountability for their role, including resignation from the firm, without a parachute package upon departure.’
A former consultant at the firm, Eran Zimmerman, also blasted two senior partners at McKinsey who allegedly oversaw the work with Purdue, Martin Elling and Dr. Arnab Ghatak.
‘It appeared to me that through vigorously promoting this crime against humanity, these senior consultants have come close to producing that much feared lethal blemish on the great McKinsey name,’ Zimmerman wrote in an email observed by the Times.
McKinsey’s work with Purdue has also drawn criticism from lawmakers in recent weeks.
Missouri Republican Senator Josh Hawley penned a letter to McKinsey’s global managing partner Kevin Sneader last week, asking him to respond by December 15 as to whether the company destroyed any documents.
Hawley’s letter also urged the company to disclose how much money it earned for its work with Purdue.
‘In light of McKinsey’s possible active role in driving the opioid crisis, Congress must consider whether to impose obligations on consulting firms to report criminal activity or specific criminal penalties for consultants playing a role in federal crimes,’ Hawley wrote.
Hawaiian Democratic Senator Brian Schatz, meanwhile, urged last month in a tweet that it was ‘essential that the next Attorney General pursue all of these criminals.’
In the wake of the criticism, McKinsey told employees in a memo that it would be changing the way in which it selects projects to undertake.
‘There are still numerous investigations and cases pending against the industry, you should not expect this will be the last time McKinsey’s work is referenced,’ executives wrote, according to the Times. ‘While we can’t change the past, we can learn from it.’
WHO ARE THE SACKLERS?
Purdue Pharma, which is run by some members of the wealthy Sackler family, has made tens of billions on opioid sales. Here is a breakdown of who the Sacklers are, including those who have and haven’t been involved in Purdue Pharma:
Arthur, a doctor and psychiatrist, founded a research laboratory in 1938, but Arthur’s real genius was in marketing and he leveraged it to sell a number of medications, including the anti-anxiety drug, Valium.
He and his younger brothers Mortimer and Raymond owned a small pharma company called Purdue Frederick that they purchased in 1952. That company produced betadine and earwax.
Arthur remained a relatively silent partner in the old Purdue and died in 1987 before it became the company we know it as today.
He never saw any of Purdue’s OxyContin profits.
He donated the funds to open a number of medical education programs, libraries and museums.
Arthur was inducted into the Medical Marketing Hall of Fame upon his death in 1987.
After his death in 1987, his brothers bought Arthur’s portion of the company.
One of his four children, daughter Elizabeth, has largely taken over his philanthropy work.
Arthur and his heirs have had no involvement in Purdue Pharma or with OxyContin.
Mortimer was an American physician and psychiatrist.
He and his brothers, the older Arthur and the younger Raymond published prolific medical research before buying a number of pharmaceutical companies, including, in 1952, Purdue Frederick.
After Arthur’s death Mortimer and Raymond bought out his descendants’ share of Purdue Frederick, and in 1991 they created the company that would become a pain management giant we now know, Purdue Pharma.
Mortimer became a lavish arts patron, known for equally extravagant donations and parties, beginning in the 1970s.
He died in 2010.
Raymond was a doctor like his older brothers, and the three were partners in all things until each of their deaths.
Together with Mortimer, Raymond found success with their opioid painkiller, OxyContin, which became the Purdue Pharma’s signature drug.
Raymond was milder and more private than his brother, Mortimer.
Raymond had two children, Richard and Jonathan, before his death last year.
Mortimer’s eldest daughter with his first wife.
She was listed as a director of Purdue’s sister company, UK-based Napp Pharamaceutical Holdings, as of December 2016.
She lives in an apartment in an iconic Upper West Side which she owns.
Its total value is estimated to be more than $122million.
Kathe is one of the directors of Napp, a UK-based company which also sold OxyContin.
She owns two suburban properties in Connecticut which are separated by another owned by someone else and she lives in an Upper East Side townhouse with her wife, Susan Shack Sackler.
The house was owned by both Raymond and Mortimer. Their children share it.
Kathe and Ilene had a brother, Robert, is deceased.
JONATHAN AND RICHARD SACKLER
Raymond’s two son by wife Beverly.
Jonathan formerly lived with his wife in Greenwich, Connecticut, in a property next to his mother’s.
Richard’s former family home is not far away in neighboring Stamford.
They have a cancer research center named after them at Yale and have both held positions at Purdue.
Richard Sackler followed in his father’s footsteps, getting his medical degree at New York University School of Medicine.
He came to Purdue after medical school, leading the research and development that ultimately produced the extended release form of OxyContin that would elevate the family’s fortune to previously unfathomable.
He became president of Purdue in 1991, pioneering marketing campaigns that enticed droves of medical professionals to buy Purdue’s opioid.
Richard became co-chairman in 2003, by which point $1.6 billion in OxyContin had been sold.
His marketing schemes sparked suspicion, and in 2015, Richard was deposed before his company paid out a $24 million settlement.
The company appealed in 2017, but the case has not moved forward.
Arthur’s daughter has publicly and persistently attempted to distance herself from branch of her family that has profited from OxyContin.
Elizabeth is a licensed psychiatrist and well-known philanthropist.
She is the founder of an eponymous Center for Feminist Art at the Brooklyn Museum in New York.
She has previously expressed disgrace for her uncles’ business.
Elizabeth has previously told DailyMail.com: ‘I, nor my siblings, nor my children have ever owned or benefited from Purdue Pharma or OxyContin or oxycodone.
‘It’s another branch of the family.’
BEVERLY AND THERESA SACKLER
Theresa, 69, owns a $45million Upper East Side apartment building but lives mostly in the UK on a 10-acre estate in the Berkshire countryside.
She is known in the UK as Dame Theresa Sackler, a title she was awarded for her sustained philanthropy and support of the arts.
Theresa is more visible than her sister-in-law.
Beverly, 94, is Raymond’s widow. She lives on a Greenwich, Connecticut waterfront estate which has an estimated land and property value of almost $50million. She also owns a 17-floor Fifth Avenue building in Manhattan.
When her husband was still alive, they donated the Raymond and Beverly Sackler Institute for Biological, Physical and Engineering Sciences at Yale. It now employs 50 people across 20 departments.
MORTIMER DAVID ALFONS SACKLER
Mortimer the only son of founding brother Mortimer, Mortimer II’s mother is Gertraud Wimmer, Mortimer’s second wife.
Mortimer David owns a luxury condo building in Boston and lives in New York City with his 42-year-old wife Jacqueline.
The couple are a regular fixture on the Manhattan social circuit.
DAVID AND JOSS SACKLER
David is intensely private but his wife, Joss, is not.
She runs the members-only women’s social club, LBV.
Among its events are group workouts at the model haven gym Dog Pound and talks such as ‘how to have the money talk with your kids.’