The Justice Department is investigating McKinsey & Company, the international consulting giant, for its role in helping pharmaceutical companies maximize their opioid sales.
The investigation is being led by the U.S. attorneys’ offices in Massachusetts and the Western District of Virginia in coordination with the department’s civil division in Washington, according to two officials familiar with the case who spoke on condition of anonymity.
Since 2021, McKinsey has agreed to pay about $1 billion to resolve investigations and lawsuits across the United States related to the company’s work with opioid manufacturers, primarily Purdue Pharma, the maker of OxyContin. McKinsey recommended that Purdue “accelerate” its sales of the drug amid the opioid crisis, which has killed hundreds of thousands of Americans. McKinsey has not admitted any wrongdoing.
News of the criminal investigation was first reported by The Wall Street Journal on Wednesday.
The investigation has been underway for several years. Endo, a pharmaceutical company that hired McKinsey to advise on the sale of the opioid Opana, said in a regulatory filing that it received a subpoena in December 2020 from the Western District of Virginia seeking information about McKinsey. The New York Times reported on the existence of that subpoena in 2022. Last year, another opioid maker, Mallinckrodt, said it received a grand jury subpoena from the same U.S. attorney’s office, but did not mention any connection to McKinsey.
Federal prosecutors are also investigating whether McKinsey obstructed justice in its handling of the records, according to The Journal.
In 2018, senior consultants at McKinsey were increasingly concerned that they might be held accountable for their work on opioids. On July 4 of that year, Martin Elling, leader of the company’s pharmacy practice, made a decision he would later regret. He emailed Arnab Ghatak, a senior partner, asking if they should delete opioid-related documents and emails.
Mr. Ghatak responded: “Thank you for the heads up. Will serve.”
Both men were fired after The Times reported in 2020 on the existence of the emails.
It’s not unusual for criminal investigations like this to last many years, especially those involving two U.S. attorney’s offices, the Justice Department and possibly also state agencies, said Rick Mountcastle, a former federal prosecutor.
He led a criminal investigation into Purdue Pharma that resulted in the company pleading guilty in 2007 to having misled regulators, doctors and patients about the dangers of OxyContin. “It’s a huge, monstrous bureaucracy that moves at a very slow pace,” said Mountcastle, who was not a source confirming the existence of the investigation.
McKinsey earned about $86 million over many years advising Purdue Pharma. Most of that work was done after Purdue pleaded guilty. In 2019, McKinsey said he would no longer advise clients on opioid-related businesses.
Ramiro Prudencio, a McKinsey spokesman, declined to comment. A Justice Department spokesperson had no comment on the case.