Nevada says the money will help pay for costs stemming from the opioid epidemic.
(CN) — A global consulting firm that worked with OxyContin maker Purdue Pharma during the height of the opioid epidemic will pay the state of Nevada $45 million as part of a nationwide settlement over its role to help boost sales of the drug.
The news comes less than a month after McKinsey & Company agreed to a $573 million settlement with 47 state attorney generals along with five U.S. territories and the District of Colombia related to the firm’s past work with Perdue and other opioid manufacturers. Nevada declined the offer due to the devastating impact the opioid epidemic had on the state, state Attorney General Aaron Ford said Monday.
“Nevada is a hardest hit state by the opioid crisis and is owed a great deal of compensation and justice,” Ford said in a statement. “It’s felt by every mother and father who has lost a child. It’s felt by siblings who have lost a sister or brother. And it’s felt by friends and colleagues who lost one of their own. My Bureau of Consumer Protection has fought on behalf of each of you, and we’re proud of the results of today’s settlement.”
For over a decade, New York-based McKinsey walked Purdue through a business model that helped the pharmaceutical giant become the nation’s top opioid manufacturer. The strategy formed the pillars of Purdue’s tactics from 2004 to 2019, according to a 9-page complaint filed by Nevada in the state’s First Judicial District Court.
Purdue hired McKinsey in 2009 to help promote “brand loyalty” to OxyContin. The consulting firm targeted specific patients and by 2013 laid out plans to increase sales for more profits.
This included sales calls on doctors who prescribed opioids at high volumes and removing discretion of sales personnel in targeting prescribers, according to the complaint. There was also discussion of removing the middleman and getting OxyContin directly to patients and pharmacies.
“Purdue approved McKinsey’s plan and strategies, and together with McKinsey, moved to implement the plant to ‘Turbochar[e] Purdue’s Sales Engine,’ under the name Evolve 2 Excellence,” said the complaint.
The settlement announced Monday resolves claims that McKinsey violated the Nevada Deceptive Trade Practices Act when it worked with opioid manufacturers to increase its sales in the state. The payment will go to pay for addiction programs and other costs associated with the epidemic.
McKinsey worked with Nevada and other states to reach its settlement agreement rather than head into a lengthy litigation or delay said Ford.
“McKinsey’s willingness to settle with Nevada, along with sister states, will help focus our energy on addressing the problem,” said Ford.
While the consulting firm has only recently settled claims brought by states, it says it decided two years ago to stop working with “opioid-specific business and have committed to being part of the solution to this serious challenge.”
“We recognize that our work for opioid manufacturers, while lawful, fell short of the high standards we set for ourselves and that we did not adequately acknowledge the epidemic unfolding in communities across the country,” the firm said in a statement.
McKinsey’s consulting work extended to other manufacturers, including Endo, Johnson & Johnson, and Mallinckrodt according to Ford’s office. The effects have devastated the nation as it fell into the grip of opioids — and that was especially true for Nevada, Ford said. Nearly 47,000 overdose deaths in Nevada were due to opioids and accounted for roughly 70% of all overdose deaths in 2018 according to the National Institute on Drug Abuse. While the latest data shows that opioid-related deaths have declined in recent years, Nevada has seen a resurgence during the Covid-19 pandemic.
Nevada will receive $23 million in the next 45 days and an additional $22 million in 120 days as part of the settlement agreement.
This month, Purdue announced a $10 billion plan to emerge from bankruptcy. The plan filed in U.S. Bankruptcy Court in White Plains, New York, signaled the company’s formal offer to settle more than 2,900 lawsuits by state and local governments, Native American tribes, hospitals and other entities.