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Linking Progressives East and West Since 1997

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How McKinsey, the World’s Most Elite Consulting Firm, Helped Turbocharge America’s Opioid Epidemic

December 14, 2020 by Leave a Comment

 

From Jacobin

An Unflinching Commitment to the Bottom Line

As the Purdue Pharma case quite morbidly illustrates, McKinsey’s managerial expertise and logistical know-how are highly sought after for good reason: when a corporation or government comes calling, it can be reasonably sure that the firm’s consultants will execute their assigned task with zeal, efficiency, and an unflinching commitment to the bottom line (whatever it happens to be).

Though the company has not been charged or sued by the federal government, its involvement in Purdue Pharma’s activities was clearly not passive or peripheral. As the settlement agreement released by the DOJ makes abundantly clear, McKinsey consultants worked closely with Purdue Pharma management both to identify the causes of declining sales and to formulate a strategy by which they could be reversed.

On the first score, their diagnosis was a simple one: “Both the reformulation and safeguards against medically unnecessary prescriptions” (in the settlement’s language) were to blame, and the “retail channel” (as the company informed Purdue Pharma) was “under intense scrutiny and direct risk.” In other words, increased awareness about the dangers of excessive OxyContin prescription had caused distributors and public authorities alike to become more cautious — a development which threatened to reduce profits. A 2014 budget presentation to Purdue Pharma’s board would subsequently identify newfound safeguards against the unnecessary prescription of opioids as “challenges” to its revenue goals.

Elsewhere in the settlement agreement, the language proves equally clinical and no less sinister. To help Purdue Pharma overcome declining sales, McKinsey consultants employed sophisticated analytics techniques to identify potential areas for increasing sales and rates of prescription such that the company’s marketing and distribution efforts could be targeted more effectively. Garnishing the initiative with the peppy, vaguely collegiate label “Evolve to Excellence,” McKinsey sent a memo to Purdue Pharma asking it to approve or reject E2E, which it suggested would “Turbocharge the Sales Engine.” As the settlement agreement details:

E2E took a multifaceted approach to increasing OxyContin prescribing and Purdue’s profits. The consulting company [McKinsey] recommended, among other strategies, refreshing Purdue’s marketing messaging — particularly around titration to higher, more lucrative dosages — and undertaking strategies to ensure prescriptions would be filled. At its core, however, E2E focused on intensifying marketing to the very highest-volume prescribers in the country by targeting them with increased frequency and minimizing sales representative discretion in identifying prescribers to target. The E2E call plans targeted the highest-volume prescribers in the country, and the program demanded stricter adherence with call plans than had existed in years past.

There is little room for interpretation here. As the federal investigation makes clear, both McKinsey and Purdue Pharma, whose representatives worked together in overseeing E2E, had full understanding of its purpose, i.e., “generating prescriptions from extreme high-volume prescribers” and pursued it anyway.

Even more disturbing is a 2017 presentation reviewed by the Times in which McKinsey presented additional options to help Purdue Pharma increase sales, among them the idea of offering a rebate to distributors for every OxyContin overdose attributable to the pills they’d sold. The presentation even included projections for how many customers at companies like CVS and Anthem would either die or develop opioid use disorders (at the former, for example, it projected 2,484 “events” in 2019, estimating a cost of $36.8 million to Purdue at a rate of $14,810 per rebate).

Despite not being charged for its involvement, internal communications from the company make clear its representatives became concerned about potential legal repercussions in 2018 when Massachusetts undertook a lawsuit against Purdue Pharma and discussed the possibility of eliminating evidence. Having suddenly discovered ethics amid a growing PR disaster, McKinsey has since announced that it will no longer “advise any clients worldwide on opioid-specific business.”

In 2018, having spent years helping Purdue Pharma spike OxyContin sales, it even published a report titled: “Why we need bolder action to combat the opioid epidemic.”

Filed Under: Jacobin, Social Justice/社会正義

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