Congress Is Investigating McKinsey Over Its Role in the Opioid Crisis
In a new assault on the global consulting giant McKinsey & Company, Congress on Friday started an investigation into the firm’s role in the opioid crisis, sending a letter demanding records related to its “business practices, conflicts of interest and management standards.”
The 12-page letter, which was sent by the House Committee on Oversight and Reform, asked for names of McKinsey clients in the health care industry as well as documents connected to its work with opioid manufacturers, distributors and retailers. The committee is also looking at how McKinsey’s consulting for drugmakers may conflict with work it has done for the Food and Drug Administration.
By advising opioid makers and “the federal agency regulating their conduct,” McKinsey “may have had a significant negative impact on Americans’ health,” the committee said.
The letter was signed by the committee’s chairwoman, Representative Carolyn B. Maloney of New York, who requested that McKinsey produce the documents by Nov. 19. McKinsey has a policy of not identifying its clients or the advice it gives.
A spokesman for the firm on Friday said McKinsey had “received the committee’s letter and will engage directly with the committee regarding their requests.”
This year, McKinsey agreed to pay all 50 states more than $600 million to settle investigations into how it had helped “turbocharge” opioid sales, focusing mostly on its work with Purdue Pharma, the maker of OxyContin. McKinsey did not admit any wrongdoing.
The request on Friday follows a narrower one on Aug. 23, from a bipartisan group of six U.S. senators seeking records from the F.D.A. on its work with McKinsey at the same time that it was regulating opioid manufacturers, calling that relationship “a potential conflict of interest.” The senators asked for more information about the firm’s work with the F.D.A. division that approved certain classes of drugs, including prescription opioids.
OxyContin and similar painkillers can be addictive and prone to abuse. From 1999 to 2019, nearly 500,000 people in the United States died of opioid overdoses, according to the Centers for Disease Control and Prevention.
The House panel is seeking information on McKinsey’s “apparent failure to monitor and prevent harmful practices,” Ms. Maloney, a Democrat, wrote in the letter, addressed to the firm’s managing partner, Bob Sternfels.
In the past several years, McKinsey has come under scrutiny from both Republicans and Democrats for a wide range of its consulting projects. In October 2018, Senator Elizabeth Warren, a Massachusetts Democrat, asked the firm for more information about its work in Saudi Arabia. Last year, Senator Marco Rubio, a Florida Republican, asked McKinsey to disclose the names of Chinese clients whose business might conflict with American national interests.
The House committee is also seeking documents beyond McKinsey’s opioid work, citing instances when consultants may have helped companies increase drug prices or “block competition” from cheaper generic drugs.
Also under scrutiny is McKinsey’s in-house hedge fund, the McKinsey Investment Office Partners, a pension fund and investment vehicle for partners that last year reported more than $31 billion in assets under management. The fund has held indirect investments in companies including its drugmaker clients. The committee wants an enumeration of all of the fund’s investments and a list of McKinsey employees who have done work with it since 2005.