The consulting firm McKinsey & Co. has agreed to pay $230 million to settle claims brought by hundreds of local governments and school districts in the United States that claimed its work for the collapsed pharmaceuticals manufacturer Purdue Pharma and other businesses contributed to an opioid addiction epidemic.
The settlements, which must be approved by the judge, were made public in documents submitted on Tuesday to the federal court in San Francisco. The sum is in addition to the $641.5 million that McKinsey has shelled out to settle legal complaints brought by state solicitors general.
McKinsey will pay $23 million to settle claims made by public school districts and another $207 million to settle claims made by counties and municipalities. Prior to now, McKinsey had stated that it had agreed to settle the cases, but had not specified how much.
In a statement, the arrangement was referred to as “a strong outcome for the communities harmed by this crisis” by Aelish Baig, an attorney for the local governments.
No misconduct has been admitted by McKinsey. The company issued a statement in which it reiterated its belief that the previous work was legal. It further stated that starting in 2019, it would stop advising customers on any matters pertaining to opioids.
States, municipal governments, and Native American tribes have filed thousands of lawsuits alleging that drug firms minimised the hazards associated with opioid medications and that distributors and pharmacies disregarded warning signs that the drugs were being trafficked illegally.
According to attorneys for the plaintiffs, the case has resulted in settlements totaling more than $51 billion, with agreements already reached with significant medication manufacturers and the country’s leading distributors.
The claims claimed that one of the top international consulting firms, McKinsey, was responsible for the lethal drug disaster by assisting Purdue Pharma and other pharmaceutical companies in creating misleading marketing strategies.
According to the U.S. Centres for Disease Control and Prevention, from 1999 to 2021, overdoses involving opioids—both prescription and illegal—killed close to 645,000 individuals in the United States.
Last month, the U.S. Supreme Court agreed to hear an appeal by President Joe Biden’s administration against the multibillion-dollar bankruptcy settlement reached by Purdue Pharma to settle related claims against the pharmaceutical company.