McKinsey & Company: The Sales Adviser Working for the Regulator

In the McKinsey opioid FDA conflict settlement, McKinsey & Company agreed to pay more than $323 million to resolve civil allegations that its advice caused medically unnecessary OxyContin claims and that it failed to disclose conflicts in its FDA work. The government alleged that the management consultancy advised Purdue Pharma on increasing opioid sales while its consultants also worked for the Food and Drug Administration, the agency monitoring drug safety. For someone inside a consulting engagement, the important decisions can sit in the sales recommendation, the staffing assignment and the promise made to the government about who would do the work.

The Justice Department announced the civil settlement on December 13, 2024. Among pharmaceutical fraud cases, this one follows the adviser whose work allegedly helped shape the client’s conduct. It also follows what that adviser told its government customer about conflicts between assignments.

McKinsey’s Purdue Advice Targeted Heavy Prescribers

The civil allegation was that McKinsey advised Purdue to “turbocharge” OxyContin marketing to High Value Prescribers, some of whom already prescribed very large quantities of the drug. The government alleged that McKinsey knowingly caused false claims through that advice despite its awareness of the opioid crisis.

OxyContin was Purdue’s extended-release opioid drug. The Justice Department described a consulting engagement aimed at increasing its sales in 2013. The alleged commercial logic was straightforward: concentrate more marketing effort on prescribers who already generated substantial volume. In the government’s account, patients received prescriptions they did not medically need, and taxpayers picked up the bill.

The manufacturer’s side of that strategy appears in the government’s earlier civil allegations concerning Purdue. The Justice Department alleged that Purdue’s owners knew the legitimate market for its opioids had contracted, sought to recapture lost sales and approved a marketing program called Evolve to Excellence. Under that program, sales representatives allegedly intensified OxyContin marketing to prescribers already writing 25 times as many OxyContin prescriptions as their peers.

That is the business decision an insider would recognize. A shrinking market became a reason to pursue more prescriptions from the people already writing the most. The McKinsey civil settlement reached the advice behind that effort. The relevant work could begin before a sales representative ever called on a doctor.

How the Advice Reached Federal Healthcare Claims

The government alleged that McKinsey’s advice caused false OxyContin claims to reach Medicare, Medicaid, TRICARE, the Federal Employees Health Benefit Program and the Veterans Health Administration. The civil allegations concerning that advice covered 2013 through 2014.

The alleged connection ran from a consulting recommendation to the prescriptions it encouraged: McKinsey advised the manufacturer on whom to target, the manufacturer marketed the drug, and federal health care programs received the resulting false claims. The government pursued the consultant for knowingly causing those claims. An insider who understands how a target list or sales plan was chosen may therefore know something the final claim alone does not explain.

In McKinsey’s civil settlement, one allegation followed prescriptions into government healthcare programs. The other followed the consultancy into the Food and Drug Administration’s own contracting process.

Purdue’s separate civil allegations show how the same concern could arise farther along the prescription’s path. The government alleged that Purdue contracted with certain specialty pharmacies to fill opioid prescriptions other pharmacies had rejected as potentially lacking medical necessity. That specialty pharmacy arrangement addressed the point where a pharmacist might stop a prescription. McKinsey’s alleged role came earlier, in the advice intended to produce more prescriptions. Each concerns a business decision affecting which prescriptions ultimately reach a payer.

FDA Conflict Disclosures and Concurrent Purdue Assignments

The FDA conflict allegation concerned what McKinsey said about its staffing rules and whom it actually assigned to the work. The Justice Department alleged that, from 2014 through 2017, McKinsey’s U.S. business knowingly misled the Food and Drug Administration by assigning consultants to work concurrently on the agency’s projects and competitively sensitive Purdue projects, contrary to its conflict-of-interest policy.

According to the Justice Department’s account of the FDA contracts, McKinsey represented during a contract solicitation that consultants serving the Food and Drug Administration would not be assigned to a competitively sensitive project for a significant period after their agency assignment. The Food and Drug Administration then awarded the firm the first in a series of contracts concerning the monitoring of the safety of products it regulated.

McKinsey’s U.S. business admitted that it did not inform the Food and Drug Administration that its consultants worked on Purdue projects around the same time they worked on the agency’s project.

The promise concerned a period of separation between assignments. The alleged staffing practice put the assignments alongside one another. A policy described to the customer and a schedule used inside the firm could tell very different stories.

The Settlement Put the Advice Under Review

McKinsey’s U.S. business entered a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General alongside the civil settlement. It was the agency’s first such agreement with a management consulting firm. Its requirements reached into engagement risks, client deliverables and the substance of the advice.

The agreement required the firm’s Compliance Committee to evaluate engagement risks and oversee certain client deliverables, and a Quality Review Program to assess advice to certain life sciences and health care clients for compliance with the law. HHS-OIG would select an independent expert to review that program and examine a sample of client engagements, including the advice given.

The review reached the recommendation itself. For a consulting insider, that puts the substance of the client deliverable at the center of the story: what did the firm advise, and who checked it before it went to the client?

What Evidence Is Needed to Prove Fraud?

For consulting work like this, we examine the connection between the advice, the client’s actions and the government claims, together with what the adviser knew. For an FDA conflict, we examine the staffing and disclosure decisions behind the government’s contract.

The McKinsey allegations make the prescriber targeting and medically unnecessary claims central to that connection. An insider may understand why the firm chose a sales strategy, how the client put it to work and what the consultants knew about the prescriptions they were encouraging.

On the Food and Drug Administration side, we look at the firm’s promise to separate assignments and who actually worked on the projects. An employee involved in staffing may understand that overlap. Someone who prepared a proposal or disclosure may know what the customer was told. Someone reviewing a deliverable may know how the advice was assessed before it went to the client.

That is why a pharmaceutical whistleblower’s knowledge of the business can matter well before the final bill. We work with insiders to connect the particular decisions they saw to the alleged conduct and the government money involved.

Why Insider Knowledge Matters in Pharmaceutical Cases

Public Citizen’s 2018 report, Twenty-Seven Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 Through 2017, found that qui tam revelations were responsible, at least in part, for 54% of the federal settlements with pharmaceutical manufacturers it examined. The McKinsey allegations show why the commercial decisions worth examining can also sit inside a manufacturer’s adviser.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know How the Engagement Worked

If you know who shaped the sales advice, staffed the government assignment or decided what to disclose, talk with our whistleblower experts about the work you saw. We work with you to build your strongest pharmaceutical whistleblower case and bring in pharmaceutical fraud whistleblower lawyers who understand consulting decisions, government contracts and the claims they can produce. We stay beside you from that first conversation through the pursuit of a recovery.