/>i19 December 2024. The U.S. Department of Justice (DOJ) recently a resolution of criminal and civil investigations of McKinsey & Company, the global consulting firm, and its work with Purdue Pharma L.P. on OxyContin sales and marketing strategies. This resolution holds significant implications for who can be held accountable for healthcare fraud, as it is the first time a consulting firm has been held accountable for its client’s criminal activity. Per the civil settlement agreement with the DOJ, McKinsey will pay more than $323 million to resolve allegations of inducing the submission of false claims to federal healthcare programs and for not disclosing conflicts of interest to the FDA.
1. Criminal Case Resolution
McKinsey & Company has agreed to a global resolution, which includes a $650 million payment toward civil and criminal investigations into its work with Purdue Pharma to “turbocharge” OxyContin sales. To avoid future related misconduct, McKinsey has agreed to a series of measures, including a compliance program and a five-year Deferred Prosecution Agreement (DPA). Notably, McKinsey is prohibited from engaging in any work tied to the marketing or distribution of controlled substances for five years.
2. Civil False Claims Act Allegations
McKinsey also resolved allegations of violations of the False Claims Act related to its work with Purdue Pharma, which resulted in the submission of false and fraudulent claims to federal healthcare programs, including Medicare, Medicaid, TRICARE, the Veterans Health Administration, and the Federal Employees Health Benefit Program. The consulting firm allegedly advised Purdue to aggressively market OxyContin by targeting High Value Prescribers, even amid growing awareness of the opioid crisis. Additionally, McKinsey allegedly encouraged Purdue’s sales strategies that caused medically unnecessary prescriptions, resulting in fraudulent claims.
3. Conflict of Interest with FDA Projects
McKinsey’s resolution extends beyond Purdue Pharma to allegations of conflict of interest fraud. From 2014 to 2017, McKinsey allowed its consultants to work on FDA and Purdue projects simultaneously, breaching its conflict-of-interest policy. McKinsey’s failure to disclose these conflicts undermines the integrity of FDA-regulated initiatives, raising serious concerns about professional ethics in consulting.
Special Agent in Charge Jodi Cohen of the FBI Boston Field Office said about the resolution, “McKinsey is now being held criminally and financially accountable for devising an aggressive marketing strategy that was in reality a roadmap to boost sales of highly addictive opioids. Their actions resulted in powerful prescription painkillers being used in an unsafe, ineffective, and medically unnecessary manner. As both health care consumers, and taxpayers, this type of fraud negatively impacts all of us.”
Whistleblowers play a pivotal role in assisting the DOJ to address and mitigate the devastating opioid crisis. With more than 84,000 Americans succumbing annually to prescription drug and synthetic opioid overdoses, whistleblowers serve as critical informants, shedding light on illegal practices within the opioid supply chain. These individuals can expose fraudulent activities, such as over-prescription, diversion of opioids, and the manufacturing or distribution of counterfeit pills laced with fentanyl by unethical companies. Under the False Claims Act, whistleblowers are empowered to report fraud against the government, on behalf of the government, through qui tam lawsuits. Prioritizing ethical practices, compliance, and transparency are essential for defending public trust. Whistleblowers remain at the heart of this effort, serving as both watchdogs and advocates for change.
