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
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”.
[20]
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.
-xSteward, Helen. “Akrasia”. Routledge Encyclopedia
of Philosophy, https://www.rep.routledge.com/articles/thematic/akrasia/v-1.
[1]
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.
[2]
Merriam-Webster. “Blitzkrieg”. https://www.merriam-webster.com/dictionary/
blitzkrieg.
[3]
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.
[4]
Penn Career Services. Undergraduate Class
of 2018. https://cdn.uconnectlabs.com/wp-content/uploads/sites/74/2019/08/20
18_Undergraduate_Career_Plans_Survey_Report.pdf.
[5]
Horsburgh, H. J. N. “The Ethics of Trust”. The Philosophical Quarterly, October
1960, Vol. 10, No. 41, https://www.jstor.org/stable/2216409.
[6]
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.
[7]
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-opa
na.html.
[8]
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-advertis
ements-legal-in-america.
[9]
Willinger, Jeremy. “Trust”. Ethical Systems,
https://www.ethicalsystems.org/trust/.
[10]
Hope by the Sea. “Prescription Opioid Doctor Kickbacks”. 18 August
2017, https://www.hopebythesea.com/blog/prescription-opioid-doctor-kickbacks
/.
[11]
Centers for Disease Control and Prevention. “Understanding the Opioid
Overdose Epidemic”. 1 June 2022,
https://www.cdc.gov/opioids/basics/epidemic.html.
[12]
Physician’s Weekly. “Is Pain Really The 5th Vital Sign?”. 28 October 2013,
https://www.physiciansweekly.com/pain-5th-vital-sign.
[13]
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-insight
s/leading-a-transformation-in-the-department-of-veterans-affairs.
[14]
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-fun
d-reporting-investigation.html.
[15]
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-si
gn.
[16]
Casey, Carolyn. “McKinsey Sued Over Consultative Role in OxyContin
Promotion”. Expert Institute, 5 April
2021, https://www.expertinstitute.com/resources/insights/mckinsey-sued-over-c
onsultative-role-in-oxycontin-promotion/.
[17]
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.
[18]
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-opi
oids.html?fbclid=IwAR1xqN4Yy6SaDv41JXtxCmuLX8h55aE2ouiP9hKE000iPUXr-ghCIE5Soo.
[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-oxyconti
n-opioids.html?fbclid=IwAR1xqN4Yy6SaDv41JXtxCmuLX8h55aE2ouiP9hKE000iPU
Xr-g-hCIE5Soo.
[20]
National Center for Drug Abuse Statistics. “Opioid Epidemic: Addiction
Statistics”. https://drugabusestatistics.org/opioid-epidemic/#west-virginia.
[21]
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-count
y-et-al-v-mckinsey-company-inc-811793.
[22]
Johnstone & Gabhart LLP. “West Virginia Comparative Negligence
Laws”. https://www.wvlaw.net/comparative-negligence-law/.
[23]
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.
[24]
LaMance, Ken. “Negligent Misrepresentation Defenses”. LegalMatch, 21
November 2018,
https://www.legalmatch.com/law-library/article/negligent-misrepresentation-def
enses.html.
[25]
Farlex. “Public
Nuisance”. https://legal-dictionary.thefreedictionary.com/public+nuisance.
[26]
LiveStories. “Mingo County Opioid Death
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[27]
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[28]
Berlik, Lee E. “Fraud: What It Is, and What It Is Not”. The Virginia Business
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[29]
FindLaw. “Civil Conspiracy”. 20 June 2016,
https://www.findlaw.com/smallbusiness/business-laws-and-regulations/civil-con
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[30]
CrowdSourceLawyers. “Differences Between Civil and Criminal Aiding and
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[31]
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[32]
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[33]
[34]
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[35]
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Accountability”. https://www.pagecentertraining.psu.edu/public-relations-ethics/
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[36]
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[37]
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[38]
[39]
Supra note eight.
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.
[40]
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-o
ver-opioid-advice-11612405236.
[41]
Douglas, Lisa. “Why Do So Many Court Cases Settle Out of
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[42]
[43]
Supra note eight.
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-wor
king-for-opioid-makers-while-also-working-for-the-agency.
[44]