McKinsey & Company’s Alleged Conflicts of Interest at the Heart of the Opioid Epidemic
EDITOR’S NOTE: As part of our ongoing efforts to help our members stay up to date on conversations occurring in and around our profession, we provide the periodic “In Case you Missed It” department. In this issue, we present an excerpt from the April 13, 2022, Interim Majority Staff Report of the House Committee on Oversight and Reform, concerning alleged conflicts of interest by McKinsey & Company on contracts with the Food and Drug Administration (FDA). This report also is referenced in the article, “Organizational Conflicts of Interest: A Cautionary Tale."
“McKinsey’s work for the FDA has focused on administrative and operational topics, including improvements to organizational structures, business processes and technology. We have not advised the FDA on regulatory decisions or on specific pharmaceutical products. More broadly, we understand and accept the scrutiny around our past client service to opioid manufacturers. This work, while lawful, fell short of the high standards we set for ourselves. Last year we reached settlements with all 50 state Attorneys General in order to provide fast, meaningful support to communities across the United States that have been affected by the opioid crisis.”
Statement on Report by the U.S. House Committee on Oversight and Reform by McKinsey & Company, April 13, 2022.
The Firm and the FDA: McKinsey & Company’s Conflicts of Interest at the Heart of the Opioid Epidemic
April 13, 2022, Interim Majority Staff Report of the Committee on Oversight and Reform, U.S. House of Representatives
This interim staff report presents preliminary findings from the committee’s investigation into McKinsey & Company’s (McKinsey) consulting services for opioid and pharmaceutical companies and McKinsey’s conflicts of interest.
The committee launched this investigation following reports that McKinsey engaged in abusive and deceptive business practices in driving the sales of prescription opioids – which have contributed to an epidemic that has killed more than half a million Americans – while also consulting for federal agencies regulating the opioid market.
The committee’s investigation has uncovered significant, years-long conflicts of interest at McKinsey, resulting from its work for the federal government at the same time that it was advising opioid manufacturers.
Documents show that one opioid manufacturer, Purdue Pharma (Purdue), explicitly tasked McKinsey with providing advice on how to influence the regulatory decisions of the U.S. Food and Drug Administration (FDA), another McKinsey client.
The committee’s investigation has uncovered evidence that McKinsey sought to use its government connections to solicit private sector business. The committee has also obtained evidence suggesting that McKinsey sought to influence government officials, including Trump administration Secretary of Health and Human Services (HHS) Alex Azar, to advance the interests of its private sector opioid clients.
The committee’s investigation has uncovered the following information:
- At least 22 McKinsey consultants, including senior partners, worked for both FDA and opioid manufacturers on related topics, including at the same time: The committee’s investigation uncovered 37 FDA contracts that were staffed by at least one McKinsey consultant who simultaneously or previously worked for Purdue. These consultants formed part of what one consultant called McKinsey’s “mini ‘army’ here at Purdue.” For example:
- In 2009, McKinsey staffed a consultant on a project in which the firm recommended Purdue “defend against strict treatment by the FDA” in the agency’s opioid-REMS [risk evaluation and mitigation strategy] safety program or “[r]aise legal claims alleging FDA impropriety.”
- In 2011, McKinsey staffed that same consultant in an FDA office responsible for overseeing elements of that same safety program on a project to define the office’s “role in monitoring drug safety.” In 2011, at least four McKinsey consultants working on a $1.8 million FDA contract to enhance drug safety and address “the adverse impact of drugs on health in the United States” were simultaneously working for Purdue – including on projects designed to persuade FDA of the safety of Purdue’s opioid products. One project involved writing “scripts” for Purdue to use in a meeting with FDA on the safety of pediatric OxyContin.
- One senior McKinsey consultant worked on three FDA projects from 2014 to 2018 to assess the safety of dangerous drugs through the FDA Sentinel Initiative while simultaneously advising Purdue.
- In 2017, a McKinsey partner began work on a $2.7 million contract to help modernize FDA’s Office of New Drugs – at the same time the McKinsey consultant was advising Purdue on maximizing the market potential of a new opioid and another potentially lucrative new drug that Purdue would soon file with the same FDA office.
- McKinsey utilized its federal government contracts, connections, and influence to solicit private sector business: Documents show McKinsey consultants sought to leverage their government contacts and experience to solicit private sector business. For example:
- In 2009, in a bid to lead a working group of opioid manufacturers, McKinsey highlighted that due to its direct work for regulators, the company had “developed insights into the perspectives of the regulators themselves.”
- In 2014, a McKinsey partner wrote to Purdue’s chief executive officer that McKinsey brought an “unequaled capability based on who we know and what we know,” highlighting the firm’s work for “state and federal regulators,” including “FDA, who we have supported for over five years.” Less than a week later, McKinsey confirmed multiple engagements at Purdue, including a project led by a McKinsey partner who frequently consulted for FDA to prepare Purdue for an FDA Advisory Committee meeting on one of its opioids.
- In 2016, a McKinsey partner encouraged other consultants to share information with Purdue about ongoing drug safety work McKinsey was doing for FDA, saying they should “talk about our work w[ith] FDA, specifically sentinel which I think would be v[ery] useful for them in opioids.”
- McKinsey submitted opioid advice to the Trump administration, including information that went to the HHS Secretary and FDA Commissioner: Documents show that McKinsey consultants with Purdue ties attempted to influence or did in fact influence public health officials in the Trump administration on the topic of the opioid epidemic. For example:
- In 2018, McKinsey consultants drafted a “transition memo” to incoming HHS Secretary Alex Azar. The memo contained input from McKinsey consultants who did work for Purdue, including one consultant who had previously recommended strategies to “turbocharge Purdue’s sales engine” and use a “wildfire” strategy to sell more opioids. This consultant recommended that the memo to Secretary Azar emphasize the “important societal benefit” of opioids. The final memo included certain recommendations that appear aligned with the interests of McKinsey’s private sector opioid clients.
- McKinsey consultants discussed the firm’s influence on a speech by FDA Commissioner Gottlieb in 2018 concerning a drug safety monitoring program. They noted that a claim about opioids made by another McKinsey consultant who had worked for both FDA and an opioid manufacturer “got into one of Scott Gottlieb’s public speeches” even though the consultant had “made it up entirely.”
- McKinsey failed to disclose its serious, longstanding conflicts of interests to FDA, potentially violating contract requirements and federal law: The Federal Acquisition Regulation (FAR) sets rules for federal agencies, including the FDA, to avoid, neutralize, and mitigate organizational conflicts of interest before awarding contracts. Pursuant to those regulations, many of McKinsey’s FDA contracts affirmatively required contractors submitting proposals to disclose potential organizational conflicts of interest. However, McKinsey produced no evidence to the committee that it ever disclosed its extensive, ongoing work for opioid manufacturers to FDA. On the contrary, McKinsey appears to have repeatedly certified that there were “no relevant facts or circumstances which would give rise to an organizational conflict of interest.” False certifications on federal contracts can lead to civil or criminal penalties, including under the False Claims Act.
- McKinsey consultants discussed deleting documents related to their work for Purdue: Documents obtained by the committee reveal that as early as May 2017, McKinsey partners discussed ways to keep McKinsey’s documents from being discovered in Purdue’s ongoing lawsuits, including putting presentations on a “neutral template” without Purdue’s logo and only showing “hard” or paper copies of presentations to Purdue. One McKinsey senior partner described the perceived benefit of the latter approach: “It will live only on our laptops and then we can delete.” Public reporting has shown that in July 2018, senior partners at McKinsey discussed destroying their documents related to their work for Purdue. Documents obtained by the committee show one of these senior partners later emailed himself a note to “delete old (pur) documents from laptop.” Despite evidence of conflicts of interest resulting from McKinsey’s work for the federal government and private sector clients, and the possibility that such conflicts may have contributed to America’s deadly opioid epidemic, McKinsey has refused to fully cooperate with the committee’s investigation. In particular, McKinsey has failed to provide basic information about certain clients and the work McKinsey did for them.