McKinsey companies at the center of the opioid crisis

In 2017, less than two years later, the FDA took the rare step of demanding that Endo take Opana off the market, citing the serious public health implications of its abuse. The company has complied.

In the five years from the emergence of the Tennessee blood disease cluster to the withdrawal of the drug from the market, the painkiller generated more than $844 million in revenue, according to corporate documents.

In 2016 in Indiana, law enforcement officials broke up a network of drug dealers. One man confessed that he purchased Opana in Detroit and sold it in bulk to a dealer. He was sentenced to six years in prison.

“Health care, schools, the welfare department are all falling apart because of the drugs, the medicines that you helped make available,” the judge said, scolding him.

“You are certainly not responsible for all of this, but you did your part.”

In June 2017, Tom Latkovich got up to speak at a healthcare conference in Chicago sponsored by his employer, McKinsey.

“Today, I start by asking, “Why do we continue to prescribe, dispense, and pay for opioid prescriptions for people we know, or at least we might know, have an incredibly high propensity to abuse them?”

mr. Latkovic, a senior partner, was not part of McKinsey’s pharmaceutical practice. Instead, his team focused on using data analysis tools to solve complex health problems and increasingly focused on the opioid epidemic.

Credit…CSPAN

Hoping to expand on this work, G. Latkovic told the audience: “We are launching a new center focused on opioids and ideas.”

The new venture’s client list includes state governments, insurance companies and healthcare systems. One of McKinsey’s most ambitious efforts was in Philadelphia, the city with one of the most highest death rates in the country from opioid overdoses.

The consultants worked with city officials for almost two months in 2019, according to two people who were local officials at the time. Both praised McKinsey’s work, which was free to the city but was later delayed in the wake of Covid-19.

Even as Mr. Latkovich’s team struggled to fight the opioid epidemic, the firm never stopped serving Purdue, which is often blamed for fueling it. And on at least two occasions, documents show, drafts of publications prepared by Mr. Latkovic’s team were turned over to pharmaceutical client consultants for review. The goal, the pharmaceutical practice manager wrote, was to assess whether “it could create any waves on social media or from journalists that could harm our Pharma customers.”

As the negative news coverage and lawsuits against Purdue escalated, some insiders worried that the scrutiny could spread to McKinsey.

In 2019, around the time of the Philadelphia project, McKinsey decided to stop advising companies on opioids after the firm’s 15-year relationship with Purdue went public as part of a lawsuit filed by the Massachusetts attorney general’s office. As Mr. Documents shows, Latkovic’s performance in 2017 earned McKinsey $7.8 million in royalties from Purdue.

The disclosure that McKinsey had advised Purdue caused controversy within the firm. “We may not have done anything wrong, but have we wondered what the negative consequences of the work we have done are and how they can be minimized?” one consultant wrote.

Dr. Gatack, the driving force behind McKinsey’s work for Purdue and Endo, has come under the spotlight. As with pharmaceutical executives, he came up with topics to discuss, this time for himself.

“The opioid crisis is terrible,” he wrote. “Admit it in advance.” But by advising clients to develop products that would be harder to abuse, “we worked directly to solve the public health crisis, not a panacea, but definitely a solution.”

In 2020, documents released as part of a Purdue lawsuit revealed that Dr. Gatack and another consultant, Martin Elling, discussed destruction of records. McKinsey fired them soon after.

The firm settled with the state attorney general in early 2021, and the documents it turned over are being held at archive operated by UC San Francisco and Johns Hopkins University.

Some of McKinsey’s former clients faced potential damages in court. Purdue filed for bankruptcy protection in 2019, and Mallinckrodt did the same the following year. Johnson & Johnson previously sold its drug business to a private equity firm and settled a number of lawsuits related to opioid marketing that the company said were “relevant and responsible.”

Endo also filed for bankruptcy amid a spate of opioid marketing lawsuits, especially Opana. In a regulatory filing, the company said it received a subpoena in 2020 from the U.S. Attorney’s Office for the Western District of Virginia, which received a guilty plea from Purdue executives a few years earlier. This time, according to Endo’s disclosure, the office needed information about McKinsey.

Top illustration by Mark Weaver.