McKinsey & Co. to pay $230 million in opioid crisis settlements with U.S. local governments 

Consulting company McKinsey & Co has reached asettlement worth$230 million to resolve a multitude of lawsuits brought forth by several U.S. local governments and school districts that alleged that McKinsey played a pivotal role in fuelling the opioid addiction crisis through its work with the bankrupt Purdue Pharma that manufactured OxyContin and other pharmaceutical companies.

The settlements, which are pending judicial approval, were unveiled in documents sent on Tuesday in federal court in San Francisco. This substantial sum is in addition to the $641.5 million that McKinsey had already paid to resolve claims lodged by state attorneys-general.

Under the terms of the settlements, McKinsey will disburse $207 million to resolve claims made by counties and municipalities, with an additional $23 million earmarked to address claims lodged by public school districts. While McKinsey had previously acknowledged its intent to resolve these cases, the exact financial terms had not been disclosed until now.

Reuters cited Aelish Baig, an attorney representing the local governments, lauded the agreement, describing it as "a strong outcome for the communities harmed by this crisis."

It is important to note that McKinsey has not admitted any misconduct in this matter. In a statement, the consulting firm maintained that it believes its past work was conducted within the bounds of the law. Furthermore, McKinsey pointed out that in 2019, it had committed to refraining from advising clients on any opioid-related business.

The opioid epidemic has resulted in a deluge of lawsuits filed by states, local governments, and Native American tribes. These legal actions have accused pharmaceutical companies of downplaying the risks associated with opioid painkillers. Distributors and pharmacies have also faced allegations of turning a blind eye to red flags indicating the illegal trafficking of these drugs.

The cumulative impact of this litigation has been substantial, with settlements exceeding a staggering $51 billion, according to legal representatives for the plaintiffs. Agreements have already been reached with major drug manufacturers and the nation's largest distributors.

The lawsuits targeting McKinsey, contended that the company contributed to the deadly drug crisis by assisting drug manufacturers, including Purdue Pharma, in devising deceptive marketing strategies and increasing the sales of opioid painkillers.

The opioid crisis has had devastating consequences, with about 645,000individuals succumbing to overdoses involving opioids, spanning both prescription and illicit drugs, from 1999 to 2021, as reported by the U.S. Centres for Disease Control and Prevention.

In a related development, the U.S. Supreme Court recently agreed to consider a challenge mounted by President Joe Biden's administration against Purdue Pharma's multi-billion-dollar bankruptcy settlement, which seeks to resolve associated claims against the pharmaceutical manufacturer.

(With inputs from Reuters)

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