NJ announces $16M settlement with Murphy’s preferred consultant McKinsey

Daniel J. Munoz//February 4, 2021//

NJ announces $16M settlement with Murphy’s preferred consultant McKinsey

Daniel J. Munoz//February 4, 2021//

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New Jersey is getting $16 million as part of a nationwide opioid settlement reached with consulting giant McKinsey & Company, the state attorney general’s office announced on Feb. 4.

According to a NorthJersey.com report, McKinsey has been retained by the Murphy administration for $35 million in services over the years, including at NJ Transit, the New Jersey Economic Development Authority and Gov. Phil Murphy’s response to the COVID-19 pandemic.

Murphy’s office did not return requests for comment on whether the administration will end their contracts with McKinsey. Representatives from McKinsey could not be reached for comment either.

New Jersey’s $16 million award is a slice of the $573 million settlement being split among 47 states, the District of Columbia and five U.S. territories.

McKinsey allegedly “created and carried out a host of hard-charging sales strategies that were employed by Purdue [Pharmaceuticals] and other major opioid-manufacturing pharma clients to realize new, bigger and more lucrative target markets for their drugs,” said New Jersey Attorney General Gurbir Grewal in a Thursday morning statement.

Between 2004 and 2019, McKinsey sold Purdue strategies to “turbocharge” their sales of Oxycontin “well after the opioid epidemic had peaked,” and advised them to “[play] both ends of the epidemic by advising Purdue on the profit potential of manufacturing and marketing opioid rescue and treatment medications,” Grewal’s office added.

In 2013 for example, McKinsey laid out the so-called “Turbocharge Purdue’s Sales Engine,” where they took steps with an unnamed pharmacy chain to keep them from “scrutinizing suspicious opioid orders,” encouraged advocate groups to oppose “regulator-set dispensing limits,” and promote OxyContin mail deliveries.

McKinsey tried similar tactics with drugmakers Johnson & Johnson and Endo, “earning millions of dollars for designing and implementing marketing programs to help bolster their opioid sales,” Grewal’s office said.

According to a New York Times November report, McKinsey suggested a plan for Purdue to give its distributors a rebate for every Oxycontin overdose, but that plan was never adopted.

In November, Murphy called those revelations about McKinsey “sickening” and “appalling,” but decided to still stick with the consulting firm.

“We are continuing to deliver on our promise to hold accountable the corporations and executives whose bad acts contributed to the opioid epidemic that has brought so much despair to our communities,” Grewal said on Thursday.

“With today’s settlement, McKinsey is paying much more than the money it made advising opioid manufacturers like Purdue Pharma on how to sell more of their addictive drugs.”

Purdue entered bankruptcy in 2019, the year that McKinsey ended its consulting work with the company. New Jersey filed suit against Purdue and their owners, the Sackler family, alleging that they flooded the market with OxyContin and other addictive opioids.