Consulting firm McKinsey to pay $78M in U.S. opioid settlement with health insurers, company benefit plans

Consulting firm McKinsey & Co. has agreed to pay $78 million to settle claims by U.S. health insurers and benefit plans that its work with drug companies helped fuel an epidemic of opioid addiction.

The settlement, disclosed in documents filed on Friday in federal court in San Francisco, must still be approved by a judge. Under the agreement, McKinsey would establish a fund to reimburse insurers, private benefit plans and others for some or all of their prescription opioid costs.

The class action settlement resolves claims by so-called third-party payers such as insurers that provide health and welfare benefits.

The agreement is the final of a series of settlements McKinsey has reached to resolve lawsuits over the U.S. opioid epidemic. The firm previously paid $641.5 million to resolve claims by state attorneys general and another $230 million to resolve claims by local governments. It has also settled cases brought by Native American tribes.

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The litigation has resulted in more than $50 billion in settlements with drugmakers, distributors and pharmacy chains.

Plaintiffs accused McKinsey of contributing to the deadly drug crisis by helping drug manufacturers, including Purdue Pharma – the maker of OxyContin – create deceptive marketing strategies to increase sales of painkillers. Insurers said these tactics forced them to pay for prescription opioids instead of safer, non-addictive and lower-cost drugs, including over-the-counter pain medication, and that they had to pay for the opioid addiction treatment that followed as a result.

McKinsey did not admit wrongdoing and said in a statement that it maintains that its past work was lawful. The group also said it had committed in 2019 to no longer advise clients on any opioid-related business.

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But Paul Geller, a lawyer for the plaintiffs, said in a statement the drug crisis stemmed from an oversupply of dangerous addictive drugs and that the case was brought to “recover some of the money spent on the over-prescribed pills.”

Nearly 645,000 people died in the U.S. from overdoses involving prescription and illicit opioids from 1999 to 2021, according to the U.S. Centers for Disease Control and Prevention.

Earlier this month, the U.S. Supreme Court heard a challenge to Purdue Pharma’s multi-billion-dollar bankruptcy settlement resolving related claims against the drugmaker.

Reuters and The Associated Press contributed to this report.