McKinsey Lawsuit: State Settlements and $650M Federal Resolution

McKinsey & Company has paid close to $1 billion so far, and faces obligations exceeding $1.6 billion in total, to resolve lawsuits and federal charges over its role in the U.S. opioid epidemic. The McKinsey opioid lawsuits stem from more than a decade of consulting work for Purdue Pharma and other manufacturers, and they culminated in a $650 million federal criminal and civil resolution in December 2024 — a rare criminal case against a major consulting firm.¹²

What McKinsey Did for Purdue Pharma

McKinsey advised Purdue Pharma for more than a decade, and its central strategy, described in internal documents and later court filings, was to “turbocharge” OxyContin sales.³ Federal prosecutors said the work resulted in prescriptions that were “unsafe and medically unnecessary.”¹

The firm’s recommendations to Purdue included identifying doctors who already wrote large numbers of OxyContin prescriptions and steering the sales force to target them for more.⁴ McKinsey pushed Purdue toward higher, more profitable doses and crafted messaging to convince physicians to prescribe more OxyContin to more patients. It also advised Purdue to route OxyContin directly to patients through mail-order pharmacies, bypassing retail pharmacy safeguards that flagged suspicious high-dose prescriptions.³ As pressure mounted, McKinsey suggested Purdue “band together” with other opioid manufacturers to fight tighter FDA oversight and drew up plans to counter “the emotional messages from mothers with teenagers that overdosed.”⁵

A 2013 proposal approved by the Sackler family, who owned Purdue, laid out the turbocharge strategy in explicit terms.⁶ McKinsey’s opioid work was not limited to Purdue: a 2022 congressional investigation found the firm also consulted for Johnson & Johnson, Endo International, and Mallinckrodt on opioid-related matters while simultaneously advising the FDA on drug safety.⁷

Document Destruction and the Only Individual Prosecution

As lawsuits against Purdue mounted in 2018, two senior McKinsey partners discussed getting rid of evidence. Senior partner Martin Elling emailed a colleague in July 2018 suggesting they consult the firm’s risk committee about whether to “eliminate all our documents and emails,” then emailed himself a month later a reminder to “delete old pur [Purdue Pharma] documents from laptop.”⁶ Forensic analysis later confirmed that between April and September 2018 Elling deleted Purdue-related files and folders from his McKinsey-issued laptop and Outlook account.⁸

Senior partner Arnab Ghatak, who had led more than 30 McKinsey engagements with Purdue between 2004 and 2018, was involved in the same conversation.⁷ McKinsey fired both men in February 2021. No criminal charges against Ghatak have been reported.

Elling pleaded guilty in January 2025 in federal court in Abingdon, Virginia, to one count of knowingly destroying records with intent to obstruct a DOJ investigation.⁶ On May 22, 2025, he was sentenced to six months in federal prison, two years of supervised release, 1,000 hours of community service, and a $40,000 fine. Acting U.S. Attorney Zachary T. Lee said at sentencing that Elling “willfully destroyed records in order to obstruct a Department of Justice investigation” and that “if you destroy records, if you impede a Department of Justice investigation, you will go to jail.” U.S. Attorney Leah B. Foley called the conduct “a calculated effort to hinder a federal investigation into one of the most devastating public health crises in our nation’s history.”⁸ Elling is the only individual to face criminal charges from McKinsey’s opioid work.

The 2021 State Attorney General Settlements

In February 2021, a bipartisan coalition of 47 state attorneys general, the District of Columbia, and five U.S. territories reached a $573 million settlement with McKinsey.⁹ Washington State and West Virginia struck separate deals worth $13 million and $10 million, bringing the total across 49 states to roughly $596 million.¹⁰ Nevada, which did not join, announced its own $45 million settlement in March 2021 under the state’s Deceptive Trade Practices Act, covering McKinsey’s marketing work for Purdue, Endo, Johnson & Johnson, and Mallinckrodt.¹¹

Beyond money, the 2021 settlements required McKinsey to disclose tens of thousands of internal documents, adopt a document retention plan, implement an annual ethics code for partners, and stop advising companies on Schedule II and III narcotics.¹²

Settlements With Local Governments, Tribes, and Insurers

Hundreds of counties, cities, school districts, tribes, and health plans consolidated their lawsuits into a multidistrict litigation in the Northern District of California, In re McKinsey & Co., Inc. National Prescription Opiate Consultant Litigation, Case No. 3:21-md-02996-CRB, before U.S. District Judge Charles R. Breyer.¹³ The MDL produced three class settlements:

A $230 million settlement for political subdivisions, counties, and school districts, granted final approval in February 2024. Eligible entities received automatic payments under the same allocation formula used in earlier national opioid settlements, with funds restricted to opioid abatement uses.¹⁴¹⁵
A $39.5 million nationwide settlement for Native American tribes, effective December 2023 and open to all 574 federally recognized tribes regardless of whether they had sued. Payments began in January 2024, with 85% going to abatement and 15% to attorney fees.¹⁶
A $78 million settlement for roughly 42,000 health plans and private benefit plans that had paid for opioid prescriptions and related treatment. Only seven class members opted out, and Judge Breyer granted final approval in August 2024.¹⁷

Not every MDL claim is resolved. Parents of children born with neonatal abstinence syndrome sued McKinsey, and in May 2024 Judge Breyer allowed some negligence per se claims to proceed while dismissing conspiracy, public nuisance, and fraud theories.¹⁸

The $650 Million Federal Resolution

The largest single penalty came on December 13, 2024, when McKinsey’s U.S. arm entered a five-year deferred prosecution agreement with the Department of Justice. The criminal information was filed in the Western District of Virginia, Case No. 1:24-cr-00046-RSB-PMS, jointly brought by the U.S. Attorney’s offices in the Western District of Virginia and the District of Massachusetts and the DOJ’s Consumer Protection Branch.¹⁹²⁰

Under the DPA, McKinsey U.S. accepted responsibility for two charges: a misdemeanor count of conspiring to aid and abet the misbranding of prescription drugs, and a felony count of obstruction tied to Elling’s document destruction.² The misbranding conspiracy count covers conduct from 2012 to 2018 during which McKinsey allegedly “knowingly and intentionally” aided Purdue in pushing OxyContin prescriptions without valid medical need.⁴ McKinsey agreed to the “facts and allegations” behind the criminal charges but did not admit liability on the civil side.¹

The $650 million, payable over five years, breaks down as:

$323 million in False Claims Act civil penalties, of which roughly $109 million is restitution to federal healthcare programs.
$231 million as a criminal fine.
$93 million in forfeiture of proceeds from McKinsey’s Purdue engagements.
$2 million to the Virginia Medicaid Fraud Control Unit.²

The DPA also imposes ongoing restrictions. McKinsey must run an enhanced compliance program, is permanently barred from any work related to the marketing, sale, promotion, or distribution of controlled substances, and must submit to oversight by the DOJ and the HHS Office of Inspector General.² The firm entered a five-year Corporate Integrity Agreement with HHS OIG, effective December 11, 2024, with an estimated completion date of December 2029.²¹ Any violation could expose McKinsey to contempt proceedings and prosecution on the underlying charges.

Running Total and What’s Still Open

Across all proceedings, McKinsey’s opioid-related obligations top $1.6 billion:

$573 million to 47 states, D.C., and five territories in February 2021.⁹
$13 million to Washington State and $10 million to West Virginia in February 2021.¹⁰
$45 million to Nevada in March 2021.¹¹
$39.5 million to Native American tribes in December 2023.¹⁶
$230 million to political subdivisions and school districts in February 2024.¹⁴
$78 million to health insurers and third-party payors in August 2024.¹⁷
$650 million in the federal criminal and civil resolution in December 2024.²

McKinsey has acknowledged that it has “paid nearly $1 billion to settle just a fraction” of the proceedings it faces, and additional claims are still moving through the courts, including those from parents of children born with neonatal abstinence syndrome.¹⁸

1
NPR. McKinsey Purdue Opioid Prosecution DOJ
2
McKinsey & Company. Opioid Facts
3
Massachusetts Attorney General. AG’s Office Secures $573 Million Settlement With McKinsey for Turbocharging Opioid Sales
4
ABC News. McKinsey to Pay $650 Million for Role in OxyContin Epidemic
5
The New York Times. McKinsey Advised Purdue Pharma How to Turbocharge OxyContin Sales
6
The Guardian. McKinsey Partner Destroyed Opioids Record
7
House Committee on Oversight and Reform. McKinsey Opioid Conflicts Majority Staff Report
8
U.S. Department of Justice. Former Senior Partner at McKinsey and Company Sentenced
9
Virginia Attorney General. Herring Secures $573 Million Settlement With McKinsey
10
The New York Times. McKinsey Settles for Nearly $600 Million Over Role in Opioid Crisis
11
Nevada Attorney General. Attorney General Ford Settles With McKinsey Over Nevada’s Opioids Epidemic
12
Illinois Attorney General. $573 Million Settlement With McKinsey Over Role in Opioid Epidemic
13
FindLaw. In re McKinsey & Company, Inc. National Opiate Consultant Litigation
14
McKinsey Subdivision Class Action Settlement. McKinsey Subdivision Class Action Settlement
15
McKinsey Subdivision Class Action Settlement. McKinsey Subdivision Class Action Settlement FAQ
16
McKinsey Tribal Settlement. McKinsey Tribal Settlement
17
Courthouse News Service. McKinsey’s $78 Million Opioid Settlement to Reimburse Insurers Gets Final Approval
18
Bloomberg Law. Parents of Opioid Victims Have Claims Trimmed in McKinsey Case
19
McKinsey & Company. Criminal Information
20
U.S. Department of Justice. Justice Department Announces Resolution of Criminal and Civil Investigations Into McKinsey
21
HHS Office of Inspector General. McKinsey & Company Inc. United States Corporate Integrity Agreement