McKinsey and Its Opioids

Scandal
By Madison Weiss

In 2007, Purdue Pharmaceutical pleaded guilty to misbranding OxyContin.  The

case against Purdue alleged the company downplayed the medication’s
addictive properties.  That year, opioids were estimated to already be
responsible for 6.1 deaths per 100,000 people, or over eighteen thousand
people in the United States.  It was clear that opioids, including those legally
prescribed, had a fatal impact on the country.  It looked like we might have
turned a corner as Purdue was ordered to pay over $600,000,000.  This was one
of the largest fines ever imposed in such a case, sending a message that this sort
of behavior was not acceptable and would not be tolerated.  

Until it happened again.  

In 2020, Purdue pleaded guilty once more to improper marketing.  But this time,
the company was not acting alone.  In the wake of the 2007 case, members of
the Sackler family, who founded and owned Purdue, sought advice.  In 2009, the
company hired McKinsey to advise them on how to move forward in the wake of
the lawsuit.  Consequently, McKinsey directed them to increase their sales of
OxyContin.  To do so, the management consultancy crafted strategies to focus
on pharmacies, physicians, and individuals in a way that would later be referred
to as “over-marketing and over-prescribing”.  

Strategies Targeting Pharmacies

One such method noted for its particular coldness is rebates.  McKinsey
proposed Purdue make payments to distributors like CVS for every patient who
became addicted to or overdosed on OxyContin.  This compensation would be
offered as damages for the sale of this product, not to the patients, but to the
pharmacies.  The payment represented the cost to keep it in the interest of both
parties to continue high volumes of opioid sales.  The inherent worth of human
lives never entered this equation to determine each “event”, the term used for
an addiction or overdose, was worth exactly $14,810.  

This sort of calculus is common in business.  We trace this tendency back to the
work of Milton Friedman, an economist who emphasized responsibility to
shareholders above all else.  The sentiment behind this, as justified by
academics like Stephen Bainbridge, is to avoid “indeterminate balancing
standards”.  From this point of view, having one group to which companies must
always be responsible ensures firms will always make the responsible
choice.  The alternative would be an ability to shift responsibility to a particular
group to justify making a particular choice.  In response, critics point out that
just because a framework gives a consistent result does not mean the result is
justified.  The thousands of lives lost due to McKinsey’s decision to emphasize
Purdue’s bottom line over concern for the general public magnify this
concern.  What’s more, the argument this was a responsible outcome seems like
a smokescreen for a decision that was in all likelihood the result of akrasia
prompted by greed.  Akrasia means acting against one’s moral principles
through weakness of will.[1]  To borrow the words of Tom Peters, McKinsey’s
akrasia was an “insane push for profitability at all costs”. [2]

Strategies Targeting Physicians

McKinsey showed the same disregard for the common good in its advice on how
to approach physicians.  They began by profiling physicians, focusing on those
who prescribed opioids either far more frequently or far less frequently than
their counterparts.  Salespeople were then sent to these individuals to convince
them to prescribe opioids more often.  

Frequent prescribers would be encouraged to prescribe “even more OxyContin,

in higher doses, for longer times, to ever more patients”.  This push is estimated
to have led to a tripling in sales revenue.  Infrequent prescribers would be
persuaded the drug was in fact not as harmful as feared, in the hopes that
downplaying associated risks would get reluctant physicians to begin prescribing
more freely.  This latter tactic was dubbed “Sales Force Blitz”.  The name is
ironically fitting, with “blitz” coming from the term “blitzkrieg”, meaning “a violent
surprise offensive”.[3]  

McKinsey surprised both physicians and the world by pushing a sales tactic that
would cause considerable harm.  While not all consulting firms have the most
stellar reputations, McKinsey was revered as one of the oldest, largest, and most
prestigious consulting firms in the world.  For almost one hundred years, the
company prided itself on the “McKinsey mystique”, or the idea partners would
always act to “uphold absolute integrity”.[4]  This reputation has attracted talent
from some of the most prestigious universities, with McKinsey being the sixth
most popular employer of graduates from the University of Pennsylvania. [5]  Such
status within the advising community created broad trust in McKinsey as a
reputable actor.
H. J. N. Horsburgh identifies three types of trust:  innocent, guilty, and
therapeutic.[6]  Innocent trust is born of a lack of experience and duplicity.  When
a person trusts innocently, it is because they do not know better.  On the other
hand, guilty trust is born of carelessness.  When a person trusts guiltily, they
would have identified the other party was acting wrongly if only they had
bothered to connect the dots.  Therapeutic trust is distinct due to its
intentionality.  It is a doxastic form of trust.  This means it justifies trust through
belief.[7]  In this case, the belief that giving trust promotes trustworthiness.  Any
of these three lenses can potentially explain physician-consultant relationships
with regards to opioids.  

In terms of innocent trust, a physician who was told by McKinsey representatives

that OxyContin was safe and who herself was not a deceitful person likely would
not have questioned such a claim.  By feeding lies to these physicians, McKinsey
was effectively “trading on its reputation… to make the crisis worse”. [8]  Yet to
assume all physicians would have such a level of naivete is unrealistic.  As a
country, we have a history of drug companies pushing false claims about
medications to make a profit.  John Marshall describes America as “a proud
nation of salespeople”.  He observes that as long as people blindly trust false
claims, they allow sales representatives to take advantage of them as a “gullible
consumer”.[9]  Accordingly, trust in these representatives is guilty.  Such trust
would not exist if physicians questioned the veracity of the claims made by sales
representatives.  

Such a view is reinforced by Robert Hurley’s six elements of trustworthiness.

[10]
  One of these elements is alignment of interests.  Profit and patient care are
not always aligned and are sometimes, as in the case of opioid overprescribing,
diametrically opposed.  If a physician knows this background and still takes the
word of a sales representative, she is trusting guiltily.  Clearly, the representative
cannot be completely trustworthy, and the physician’s trust therefore makes her
worthy of blame.  Alternatively, therapeutic trust would assume she does
recognize this misalignment of incentives.  In such a case, her trust acts as a
tool.  By treating a representative as trustworthy, she would hope to inspire
trustworthy behavior.  As a result, the representative would be to blame for
betraying this trust.

This of course assumes that trust is the motivating force behind changes in
physician prescribing behavior, which may be a naive assumption.  Trust is only
a factor in this equation if a physician is using the advice of a representative to
make an honest recommendation in a patient’s best interest.  But this may not
be her goal.  She too can be swayed by the profitability of
overprescribing.  Research estimates that “between August 2013 and December
2015, 375,255 opioid-related payments were made to 68,177 doctors. Upwards
of $46 million paid out, none of which was for a physician conducting
research.”[11]  It is no coincidence the rise in synthetic opioid overdoses began in
2013,[12] as physicians were paid to overlook the consequences of opioid
overprescribing. 

An added layer to the complexities surrounding increased opioid prescribing is

the idea of pain as the fifth vital sign.  This concept was born from a desire to get
physicians to respect and address their patients’ pain, as well as a perception
that pain was being undertreated.  From this perspective, overprescribing
appears like an accidental overcorrection towards appropriately addressing
pain.  While Purdue and McKinsey still evidently profited off this development, it
is worth noting other factors at work.  It is possible McKinsey played a role in
laying the groundwork behind pain as the fifth vital sign.  This idea originated in
the Veterans’ Health Administration before being made a standard in 2001.
[13]
  McKinsey has a partnership with the Department of Veterans’ Affairs. [14]  Of
course, we cannot conclude from this information alone McKinsey in any way
encouraged this development, especially given the company does not regularly
disclose the advice that it gives to clients[15].  Yet this coincidence is noteworthy,
particularly considering that pain as a vital sign is no longer recommended given
the impact of the opioid crisis.[16]

Strategies Targeting Patients

When this cost became evident, McKinsey worked to

maintain sales by “helping Purdue find a way ‘to
counter the emotional messages from mothers with
teenagers that overdosed’ from OxyContin”. [20]

In addition to McKinsey’s influence on healthcare organizations and physicians,

the company also directly targeted patients.  Representatives encouraged
Purdue to create financial incentives for consumers to purchase OxyContin, such
as opioid savings cards.[17]  This consultancy strategy had a measurable impact on
opioid use, with data showing savings cards increased the number of patients
who took opioids for longer than ninety days by sixty percent.  According to the
Massachusetts Department of Health, patients who take opioids for such a long
period of time are thirty times more likely to die of an overdose. [18]  Savings cards
achieved McKinsey’s goal of raising purchases of opioids at a quantifiable and
striking cost to society.  When this cost became evident, McKinsey worked to
maintain sales by “helping Purdue find a way ‘to counter the emotional
messages from mothers with teenagers that overdosed’ from OxyContin”. [19]  
Legal Action Against McKinsey
As a result of McKinsey’s involvement in the opioid crisis, residents of Mingo
County sued in a class action lawsuit.  Mingo county sits in West Virginia, where
the death rate from opioids is nearly three times the national average.
[21]
  Residents’ legal counsel gave eight causes of action for judicial
intervention:  negligence, negligent misrepresentation, public nuisance, fraud
and deceit, civil conspiracy, civil aiding and abetting, unjust enrichment, and
intentional acts and omissions[22].  These charges focus on McKinsey’s advisory
role and the resulting increase in opioid addiction and overdose deaths.  The
charges differ in how directly plaintiffs must prove McKinsey was culpable as an
agent, as well as for what actions the company is held responsible for.  

Negligence occurs when a party breaches a duty of care, causing damages.[23]  A

duty of care is a requirement for an agent to reasonably avoid causing injury.
[24]
  In this case, McKinsey acted to raise opioid sales, raising rates of addiction
and death, and ultimately causing injury.  Negligent misrepresentation
specifically refers to when an untrue claim is made, carelessly causing harm,
[25]
 which occurred when McKinsey representatives downplayed the potential for
abuse to physicians.  Public nuisance refers to a crime that threatens the
wellbeing of a community.[26]  In locations like Mingo County, where
approximately ninety-one out of every one hundred thousand residents died
from opioid-related causes,[27] action contributing to addiction clearly jeopardized
the community.  Unjust enrichment describes one party benefitting at another’s
expense in a way that is unethical,[28] such as the profit McKinsey made by
advising overprescribing.

Whereas these charges do not require the action be intentional, fraud and deceit
requires misrepresentation of information happen knowingly. [29]   Additionally,
civil conspiracy occurs when two or more parties knowingly agree to act
unlawfully to harm another,[30] and civil aiding and abetting refers to this plan
being acted upon.[31]  These charges apply to the working relationship between
McKinsey and Purdue, which had already been found guilty of committing
federal crimes with regards to the opioid crisis.  An intentional act occurs when a
party, acting purposefully, harms another,[32] and an intentional omission occurs
when a party unintentionally does not  act, allowing harm to occur.[33]  McKinsey
can be said to have intentionally acted by advising Purdue.  They also can be
seen as having committed an intentional omission by not having implemented
measures to ensure patient safety.  Intention clearly plays an important role in
these charges.  

Yet the question of intention is a complex one.  The legal definition of this term
is “a design, resolve, or determination of the mind”.[34]  This presents an issue,
given that a person’s thoughts cannot be examined directly but must rather be
reconstructed.  Simply asking an agent her intentions is not a satisfactory
solution.  When McKinsey leadership puts out a statement saying, “any
suggestion that our work sought to increase overdoses or misuse and worsen a
public health crisis is wrong”,[35] their incentive to lie about its intention is
obvious.  

One way to resolve this issue is to focus on the aftermath of a decision to

deduce the intention behind it.  There are various philosophical perspectives
that link intention to outcome.  One of the earliest is Aristotle’s conception of
moral responsibility, which is built on an “awareness of action and
consequences”.[36]  A second is Robert Bidinotto’s critique of the so-called
“morality of good intentions”, where he argues for the necessity of considering
evidence and logic over moral intuitions.[37]  A third is Elizabeth Anscombe’s
definition of intention as consisting of two parts: judgment and performance.
[38]
  From this perspective, intention is not merely what someone wants to
occur.  Rather, it is a combination of their ability to reason to a certain
conclusion and their success in acting to bring that conclusion to bear.  

When asked about the role McKinsey played in the opioid crisis, a consultant
responds, “we may not have done anything wrong, but did we ask ourselves
what the negative consequences of the work we were doing was, and how it
could be minimized?”.[39]  This lack of judgment makes any claim to good
intentions impossible.  Additionally, the ways in which McKinsey acted, or the
company’s performance, clearly fueled addiction.  Some of these actions, like
offering rebates for cases of addiction, also suggest that addiction was factored
into judgment and written off as an appropriate cost of doing business.

Implications for Society

Framing this in terms of medical ethics, which upholds the tenets of non-
maleficence and justice, this intention is clearly unethical.  One can argue
McKinsey, as a consulting firm and not a group of physicians, should not be
bound by this frame.  However, medical ethics is considered to encompass both
“health care professionals and their organizations”. [40]  By advising physicians,
McKinsey made itself one of their organizations.  As a result, the company
bound itself to their code of ethics, which McKinsey clearly breached.

This breach constitutes a debt that McKinsey owes to society.  The judicial

system upheld this conclusion when, in response to the charges brought against
McKinsey, the court approved a settlement for the company to pay over five
hundred million dollars.  This money will be used to directly support affected
communities, financing treatment like rehabilitation services. [41]  Such services
represent an important step in healing the trauma of the opioid crisis. 

Yet a settlement is typically considered to be a response to uncertainty of what

the verdict would be if a case were brought to trial.[42]  Given the strong evidence
against McKinsey, it is worth questioning why residents of Mingo County would
doubt their ability to win the case.  This draws our attention to just how involved
McKinsey may have been in shaping the law.  The company has a history of
lobbying groups to pass legislation beneficial to the consultancy. [43]  Even more
morally dubious is that McKinsey was advising the FDA at the same time it was
advising Purdue.[44]  This allowed it to weaken citizen protections and put itself at
an unfair advantage in legal proceedings.  Additionally, by settling, McKinsey did
not have to admit responsibility to any of the charges brought against it.  This
outcome allows the company to keep its reputation.  As such, the cost to
McKinsey is mostly financial, sending the worrying message that this
management consultancy’s commodification of human lives really is just another
business expense.

-x-

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 Supra note eight.

[39]

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[43]

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