The Opioid Epidemic And Its Perpetrators
Since the late 1990s, the Opioid epidemic has been going on in the United States, claiming the lives of 130 people every day. Since 1999, over 760,000 people have died from a drug overdose, and two thirds of those deaths involved Opioids, according to the U.S. Department of Health and Human Services. In the center of the Opioid epidemic are pharmaceutical companies like Purdue Pharma that pushed the sales of Opioid drugs, even after knowing the risks of addiction and death, as well as companies like McKinsey & Company.
The pharmaceutical companies were not alone in their endeavors to promote Opioid drugs. Consulting firms were hired to work on marketing tactics to encourage these sales, such as McKinsey & Company, an American management consulting firm that has gone global since its founding in 1926. As companies are starting to be held responsible for the involvement in perpetrating the Opioid crisis, it has started to raise even more questions.
McKinsey & Company Settlement To Go To Treatment And Rehab
In December of 2020, the corporate consulting firm McKinsey & Company issued an apology after documents were made public that displayed the firm’s involvement in fueling the Opioid epidemic. McKinsey worked with pharmaceutical company Purdue Pharma, a company that has plead guilty to federal charges linked to the promotion of Opioids, mainly OxyContin. The fact that Opioids are addictive drugs that can lead to dependence and overdose is now common knowledge, with thousands of Americans dying from an Opioid overdose each year. Due to this public knowledge, McKinsey developed a series of proposals designed to “turbocharge” profits of Opioids once again, according to the documents that were released, “by attorneys representing states suing Purdue Pharma,” according to NPR.
NPR stated that one of the proposals involved making $14,000 payments to insurance companies whenever someone became addicted or overdosed on Opioids that were linked to Purdue Pharma. McKinsey & Company released an apology stating, “We recognize that we did not adequately acknowledge the epidemic unfolding in our communities or the terrible impact of Opioid misuse,” after they came under fire for their involvement.
In February 2021, McKinsey & Company reached a $573 million settlement for its role in boosting sales of dangerous Opioids like OxyContin. The settlement will be paid out to 49 states across the United States, primarily for treatment and rehabilitation programs. As part of the settlement McKinsey does not have to admit to any wrongdoing, but they are also required to release thousands of documents that detail their involvement with Purdue Pharma. While this settlement may be seen as a win for many, some sources are raising concern that this settlement may be benefitting a McKinsey hedge fund affiliate that has ties to addiction treatment centers.
Suspected Link To Addiction Treatment Centers
According to an NBC News investigation, MIO Partners is McKinsey’s wholly owned hedge fund affiliate and 8 of its 14 board directors are current or former McKinsey executives. MIO Partners holds indirect stakes in addiction treatment centers, as well as a drug maker that manufactures Opioid overdose treatment products. During the time that McKinsey & Company was working with Purdue Pharma to boost Opioid sales, MIO Partners, “held stakes in companies that profited from increased usage,” according to NBC. This has led some to speculate that this could generate investment gains from the settlement, as the settlement is going to treatment and rehabilitation programs in communities impacted by the Opioid epidemic.
MIO’s investment managers choose where to make investments and are compensated by McKinsey, but a spokesman from McKinsey stated that the hedge fund and the firm’s consulting business are “operationally separate,” according to NBC. The spokesman also stated that, “McKinsey has no visibility into or control of how settlement money will be used by the states,” denying the claims that the firm will benefit from the settlement.