FARGO — Minnesota and North Dakota will get part of the nearly $600 million settlement with a consulting firm that worked with companies accused of contributing to a widespread epidemic of prescription pain killer addiction and overdose deaths across the U.S.
McKinsey and Co. announced Thursday, Feb. 4, that it would agree to pay $573 million to 49 states, Washington, D.C., and five U.S. territories for its work providing marketing advice to opioid manufacturers. That includes more than $7.98 million to Minnesota and over $1.76 million for North Dakota.
“McKinsey played a key role in creating marketing strategies that opioid manufacturers used to drive up sales and profit at the cost of Minnesotans’ lives,” Attorney General Keith Ellison said in a statement. “This settlement ensures they’re held accountable for it.”
North Dakota Attorney General Wayne Stenehjem said this is the first of what he hopes will be several settlements or verdicts reached with companies accused of contributing to an opioid epidemic resulting in tens of thousands of overdose deaths throughout the U.S.
"We in North Dakota have seen the devastation that the opioid crisis can cause," Stenehjem said. "We are left to contend with the devastation that these companies have caused."
The South Dakota Attorney General's Office did not return a message left by The Forum to confirm how much money, if any, it had received from the settlement.
Minnesota has lost nearly 5,000 residents to opioid overdoses in the last two decades, according to Ellison’s office. In North Dakota, that number is roughly 300, according to the National Institutes of Health.
The opioid crisis also has cost states significant money in areas ranging from health care services to the criminal justice system, state attorneys general involved in the case said.
States are supposed to use money from the McKinsey settlement to help address the damage done by opioid addiction. The states are determining exactly how the funds will be appropriated. McKinsey also must hand over tens of thousands of internal documents detailing its work with opioid companies, including Purdue Pharma.
Connecticut-based Purdue Pharma pleaded guilty in November to federal charges of conspiracy to defraud the U.S., as well as violating anti-kickback law. Federal prosecutors said Purdue marketed and sold opioids to healthcare providers, despite having reason to believe providers were “diverting them to abusers.”
Ellison said internal documents described McKinsey “turbocharging” sales for Purdue’s OxyContin, the brand name for the prescription opioid pain killer oxycodone. Purdue and other companies created artificial demand for the drug by marketing it as a long-term solution for pain, Stenehjem said. The company knew the drugs were useful for short-term acute pain but not fit for long-term use because the risk of addiction is too high, he added.
"Nonetheless, that's what they did," Stenehjem said. "It's because of their false marketing strategies that has caught too many Americans in the grip of an addiction that shouldn't have happened."
McKinsey said it ended its work with opioid-specific business two years ago. The multistate settlement agreement states the company will not be allowed to engage in future opioid ventures.
The company will not be required to admit wrongdoing or assume liability, according to the agreement. McKinsey Global Managing Partner Kevin Sneader said in a statement the company regrets “not adequately (acknowledging) the tragic consequences of the epidemic unfolding in our communities.”
“As I have said previously, we are determined to take the steps necessary to strengthen our firm’s risk management policies and culture,” Sneader said. “We will build on the steps we have already taken to learn from past mistakes and ensure we consistently meet the high standards our firm has always aspired to.”
McKinsey also must retain documents and continue to investigate allegations two of its partners tried to destroy documents in connection to the Purdue probe.