Nevada has struck a $45 million settlement deal with McKinsey & Company for the global consulting firm’s role in advising opioid makers how to sell more prescription painkillers amid a national overdose crisis.
The western state reached the deal after sitting out a multi-state settlement with McKinsey announced in February. The hard bargaining has allowed Nevada to win a settlement that’s three and a half times larger than the average settlement with other states.
“Nevada needed and deserved more than what was being made available to us in the multi-state settlement,” state Attorney General Aaron Ford said Monday. Ford, a Democrat, said that had Nevada stayed in the multi-state deal, it would have received $7 million, which he called “woefully insufficient.”
The $45 million will be paid in two installments of $23 million in 45 days and $22 million in 120 days.
McKinsey said the deal reached with Nevada is “consistent with the commitment we made in February to be part of the solution to the opioid epidemic,” and it “believes its past work was lawful.” The company said the settlement agreement does not contain any admission of wrongdoing or liability.
The New York-based company in February settled for $573 million with 47 states, the District of Columbia and five U.S. Territories. It also at the time announced separate settlements with Washington state for $13.5 million and West Virginia for $10 million.
“We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities,” McKinsey Global Managing Partner Kevin Sneader said at the time.
Opioids, which include prescription drugs like OxyContin and illegal substances such as heroin and illicit fentanyl, have been tied to more than 470,000 deaths in the U.S. Over the past two decades.
McKinsey’s role came into the spotlight in recent months when OxyContin maker Purdue Pharma LP sought to settle claims against it in bankruptcy court. The Nevada Attorney General’s Office said in legal documents that McKinsey worked with Purdue from 2004 to 2019 to boost sales even as the resulting opioid epidemic emerged.
The consulting firm helped create a plan for Purdue to “turbocharge” sales of OxyContin and other opioids, according to the office, and focused on doctors prescribing high numbers of the drug and encouraged them to prescribe patients more potent doses.
Nevada, with a population of more than 3 million, has been among the hardest-hit states by the crisis. By 2016, it had enough opioid prescriptions for 87 out of 100 residents while overdoses exceeded the national average, according to Ford’s office.
Money from the settlement will be used to address the impacts of the opioid epidemic, Ford said, but the specifics would be hammered out by the governor, state lawmakers and other officials.
The state separately is pursing a wide-ranging lawsuit against Purdue along with the company’s former president, his family, other drugmakers, distributors and pharmacies.
The civil lawsuit accuses more than 40 defendants of violating state laws about deceptive trade practices, false claims, racketeering, negligence and public nuisance. Ford said a trial date has been tentatively scheduled for 2022.
