McKinsey & Company has agreed to pay $125 million as part of Purdue Pharma’s bankruptcy settlement, resolving potential legal claims tied to its advisory role in boosting sales of the addictive painkiller OxyContin. The agreement, disclosed in a court filing submitted late Wednesday, addresses allegations that McKinsey advised Purdue on strategies to significantly increase OxyContin sales.
Purdue Pharma, which secured bankruptcy court approval for a $7.4 billion restructuring plan in November, will use the funds to compensate creditors who claim the company contributed to the U.S. opioid crisis through its aggressive marketing and sales practices surrounding OxyContin.
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The broader bankruptcy settlement had left open the possibility that Purdue Pharma could pursue legal claims against McKinsey & Company over its marketing advice, which was alleged to have contributed to the company’s decline. McKinsey’s payment resolves those potential claims, without any admission of wrongdoing by the firm.
McKinsey & Company has previously agreed to pay $1.6 billion in settlements with the U.S. Department of Justice, along with various states and local governments, over its involvement in the opioid crisis.
The firm stopped advising clients on opioid-related businesses in 2019 and has since expressed deep regret over its role, stating that it was “deeply sorry” for its guidance on increasing opioid sales and acknowledging that its work with opioid manufacturers will remain a lasting source of regret.
The settlement involving McKinsey & Company is expected to add $50 million to the compensation pool for individuals harmed by the opioid crisis—a group that had previously been projected to receive around $865 million, according to court documents.
A significant portion of the overall settlement tied to Purdue Pharma will be directed to states and local governments, which have committed to using the funds for opioid abatement programs, including addiction treatment and recovery services. Members of the Sackler family are contributing at least $6.5 billion toward funding the bankruptcy settlement.
Purdue Pharma has twice pleaded guilty to federal criminal charges related to the misleading marketing of OxyContin, admitting that it misinformed regulators, healthcare providers, and patients about the drug’s addiction risks while engaging in unlawful practices to increase opioid sales. The company is scheduled to be sentenced for its second guilty plea on April 21.
Purdue Pharma will be restructured into a nonprofit organization called Knoa Pharma, which will focus on developing and distributing medications for opioid overdose reversal and addiction treatment.
The settlement still requires approval from a U.S. bankruptcy judge before it can take effect, with Purdue set to seek approval at a court hearing scheduled for April 30 in White Plains, New York.
If approved, McKinsey & Company will pay $65 million next month, with the remaining $60 million to be paid in 2027.
