McKinsey’s Nevada Opioid Deal Brings Payouts to $641 Million

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McKinsey & Co.’s $45 million settlement Nevada’s claims the firm’s work for opioid makers harmed the state’s residents pushes the total amount the consulting company has paid to resolve lawsuits over the painkillers to more than $641 million.

Nevada, one of three states that refused to join McKinsey’s original $573 million deal with 47 state attorneys general that aimed to wipe out the company’s opioid liability, was able to get more than three times the average settlement with other states, according to Nevada Attorney General Aaron Ford.

“Nevada is a hardest-hit state by the opioid crisis and is owed a great deal of compensation and justice,” Ford said in a statement Monday. The state “needed and deserved more than what was being made available to us” in the original deal, he said at a press conference.

Meanwhile, McKinsey is far from done with opioid litigation. More than a dozen cities, counties and Native American tribes sued in the wake of the accord seeking funds to beef up treatment and policing budgets.

Local jurisdictions targeted McKinsey for advising opioid makers – such as Purdue Pharma LP and Johnson & Johnson – and helping to fuel the U.S.’s opioid epidemic by providing sales analysis and marketing advice.

The consulting firm announced in 2019 it would no longer consult with opioid makers. That move came after Massachusetts’ attorney general claimed the firm advised Purdue to push back against government efforts to reduce the number of opioid prescriptions.

McKinsey said it has now concluded deals with all 50 states and the District of Columbia as part of a drive to resolve the firm’s opioid liability.

“McKinsey has continued to take steps to strengthen its client selection policies, professional standards, and its risk and governance processes to ensure our work is consistent with our values and commitment to social responsibility,” according to the company’s statement.

Along with Nevada, West Virginia and Washington state also refused to accept McKinsey’s original opioids-settlement offer. The firm agreed to pay Washington state $13.5 million and $10 million to West Virginia. Based on the $641.5 million total accord, the average state payout tied to McKinsey’s opioid consulting work comes to $12.8 million.

The money is slated for programs to combat opioid addictions and handle the fallout from opioid deaths. More than 400,000 Americans have died of opioid-related overdoses over the last 20 years.

“We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities,” former McKinsey Global Managing Partner Kevin Sneader said when the original settlement was announced last month.

Some of new McKinsey suits have been sent to U.S. District Judge Dan Polster in Cleveland, who is overseeing a consolidation of opioid litigation. The consulting firm, however, is asking a panel of federal judges to group cases against it in Manhattan.

The consolidated case is is In Re National Prescription Opioid Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).

©2021 Bloomberg L.P.

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