McKinsey nearing deferred prosecution deal in US opioid investigation, sources say

By Nate Raymond and Mike Spector

BOSTON (Reuters) – McKinsey & Co is in the final stages of negotiating a deferred prosecution agreement to resolve a U.S. criminal investigation into the consulting firm’s work helping opioid makers boost sales that allegedly contributed to a deadly addiction epidemic, people familiar with the matter said. He said it was.

McKinsey is in talks to pay more than $600 million to resolve a long-running U.S. Justice Department investigation that also includes findings of civil violations, sources said.

The deal, which is expected to be announced before the end of the year, will result in prosecutors wanting to dismiss the charges against McKinsey after a while, as long as the company complies with the terms of the agreement.

Sources said that negotiations are continuing and the timetable for the announcement of the agreement and the terms of the agreement may change.

McKinsey and the Department of Justice declined to comment.

As part of the investigation, prosecutors are also looking into whether McKinsey obstructed justice in connection with its work advising opioid manufacturers, people familiar with the matter said. Two partners who communicated about deleting documents in 2021 were fired, McKinsey said.

McKinsey previously reached settlements worth nearly $1 billion to settle widespread lawsuits and other legal actions alleging the company helped fuel the opioid epidemic by advising OxyContin maker Purdue Pharma and other drugmakers.

Settlements included all 50 states, Washington, D.C., U.S. territories, various local governments, school districts, Native American tribes, and health insurers.

In 2019, McKinsey announced that it would no longer advise clients of opioid-related businesses. The company argued that none of its agreements included liability or admission of wrongdoing.

Purdue pleaded guilty in 2020 to criminal charges covering widespread misconduct related to prescription painkillers, including conspiring to defraud U.S. authorities and paying illegal kickbacks to both doctors and a vendor of electronic health records.

Purdue is currently in court-ordered mediation of a multibillion-dollar settlement reached in the bankruptcy case that the U.S. Supreme Court rejected.

Prosecutors in Boston and Roanoke, Virginia, are participating in the McKinsey investigation along with officials at Justice Department headquarters in Washington.

(Reporting by Nate Raymond in Boston and Mike Spector in New York; Additional reporting by Chris Prentice in New York; Editing by Bill Berkrot)