Behind the scenes, McKinsey-led companies at the center of the opioid crisis

In 2017, less than two years later, the FDA took the rare step of requiring Endo to remove Opana from the market, citing the serious public health consequences of its abuse. The company complied.

During the five years from the appearance of the blood disease cluster in Tennessee to the drug’s withdrawal from the market, the pain reliever generated more than $844 million in revenue, according to corporate filings.

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

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

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

In June 2017, Tom Latkovic got up to speak at a Chicago healthcare conference sponsored by his employer, McKinsey.

“I start today by asking, ‘Why do we continue to prescribe, dispense, and pay for prescriptions for opioids to people we know, or at least might 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 analytics tools to tackle complex health care problems, increasingly focusing on the opioid epidemic.

Credit…CSPAN

Hoping to expand on this work, Mr. Latkovic told the audience, “We are launching a new center focused on opioids and insights.”

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

In 2019, the 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 Latkovic’s team tried to combat the opioid epidemic, the company continued to provide services to Purdue, which is often blamed for causing it. And on at least two occasions, documents show, draft publications prepared by Mr. Latkovic’s team were given to consultants for review by pharmaceutical clients. The purpose, wrote a pharmacy practice manager, was to assess “whether this might create any ripples on social media or from journalists that could be detrimental to our pharmaceutical customers.”

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

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

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

Dr. Ghatak, a driving force behind McKinsey’s work for Purdue and Endo, found himself in the spotlight. As he had done with pharmaceutical executives, he crafted conversation topics, this time for himself.

“The opioid crisis is horrible,” he wrote. “Recognize it from the beginning.” But by advising customers to develop products that would be more difficult to abuse, “we were working directly on a solution to a public health crisis, not a panacea, but definitely a solution.”

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

The firm reached a settlement with state attorneys general in early 2021.

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

Endo has also raised 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 US attorney’s office for the Western District of Virginia, which years earlier had won guilty pleas from Purdue executives. This time, according to Endo’s revelation, the bureau wanted information on McKinsey.

Top illustration by Mark Weaver.

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