The consulting firm’s top executive was apologetic before Congress but denied that advising both opioid manufacturers and their federal regulator posed a conflict of interest.
The top executive at McKinsey & Company, appearing on Wednesday for the first time before Congress to answer for the consulting firm’s role in fanning the opioid crisis, came under sharp criticism from Democratic lawmakers. One likened the firm’s earnings from advising Purdue Pharma and other pharmaceutical companies to “blood money” from drug traffickers.
Bob Sternfels, McKinsey’s managing partner, testifying remotely to the House Committee on Oversight and Reform, apologized for McKinsey’s work in helping drive sales at opioid makers. He said the firm “failed to recognize the broader context of what was going on in society around us.”
But Mr. Sternfels did not cede ground on the main topic of the hearing: whether McKinsey’s simultaneously advising opioid makers and their regulator, the Food and Drug Administration, posed a conflict of interest. On that front, he insisted, McKinsey had been “transparent.”
“McKinsey did not — did not — serve both the F.D.A. and Purdue on opioid-related matters,” Mr. Sternfels told the committee. “As both McKinsey and the F.D.A. have made clear, our work for the F.D.A. focused on administrative and operational topics including improvements to organizational structure, business processes and technology.”
To some Democratic members, Mr. Sternfels’ words rang hollow. “Your apologies feel empty and insincere,” said Representative Ayanna Pressley of Massachusetts.
McKinsey had worked with Purdue, Johnson & Johnson and other opioid makers to identify doctors who were heavy prescribers of painkillers, resulting in highly addictive drugs finding their way to some of the most vulnerable people in America. The work for Purdue began in 2004 and continued for 15 years as opioid-related deaths surged.
McKinsey stopped advising opioid manufacturers in 2019 and agreed to pay about $600 million to settle investigations by state attorneys general into its role in helping “turbocharge” opioid sales. The firm, which did not admit wrongdoing, was barred from taking on such work in the future.
Carolyn Maloney, the New York Democrat who leads the committee, which began its own investigation into McKinsey in November, said the firm’s “conflicts and conduct are among the worst I have seen in my years in government.” She has been in Congress for almost three decades.
Carolyn Maloney, chairwoman of the Committee on Oversight and Reform, sharply criticized McKinsey for apparent conflicts of interest.
“We are demanding answers from one of the most evasive and secretive consulting companies in the world,” said Cori Bush, a Missouri Democrat.
In one exchange, Rashida Tlaib, a Michigan Democrat, asked Mr. Sternfels why a McKinsey consultant placed a smiley face in an email questioning whether high-prescribing doctors would even notice new F.D.A. rules requiring tougher language for painkiller labels.
The Opioid Crisis
From powerful pharmaceuticals to illegally made synthetics, opioids are fueling a deadly drug crisis in America.
Origins of an Epidemic: Purdue Pharma knew OxyContin was widely misused, but continued to promote the painkiller as less addictive.A Settlement: Purdue Pharma reached a deal with a group of states that long resisted the structure of the original bankruptcy plan. Here is what the agreement means.Detailing Tragedies: As part of the settlement, families who lost loved ones to opioid addiction were allowed to address the owners of Purdue Pharma in court.How Opioids Work: Through interviews with users and experts, we created a visual representation of how these drugs hijack the brain.A Pandemic Spike: As Covid raged, so did the opioid epidemic, causing overdose deaths in the U.S. to surge to a record high.
“I completely agree that a smiley face is totally inappropriate,” said Mr. Sternfels, who took the top post at McKinsey last July, after McKinsey said it had stopped working for opioid manufacturers.
The committee released a report this month that found at least 22 McKinsey consultants had worked for both Purdue and the F.D.A. since 2010. Even as McKinsey served F.D.A. offices charged with approving new drugs and monitoring their safety, it also advised Purdue on its interactions with the agency. Internal McKinsey documents, first reported by The New York Times, show that the firm cited its connections to regulators when seeking more work at pharmaceutical companies.
In a 2014 email to Purdue’s chief executive, one consultant stressed “who we know and what we know,” specifically highlighting the firm’s work for the F.D.A.
On April 5, a group of Senate Democrats sent a letterto the inspector general of the Health and Human Services Department, which oversees the F.D.A., asking for an investigation into possible conflicts of interest arising from McKinsey’s work.
Since 2008, McKinsey has taken in more than $140 million in fees from the F.D.A., advising the agency on a wide range of topics, including overhauling the division responsible for overseeing approvals for drugs such as opioids.
On Tuesday, in a separate Senate hearing on the F.D.A., Patrizia Cavazzoni, director of the agency’s Center for Drug Evaluation and Research, said she “anticipated” that the agency would not issue new contracts to McKinsey, pending the results of any investigations.
Maura Healey, the Massachusetts attorney general, said McKinsey had made $86 million from advising the maker of OxyContin.
In testimony to the House committee on Wednesday, Maura Healey, the Massachusetts attorney general, took issue with Mr. Sternfels’s denial that McKinsey had a conflict of interest in working with both Purdue and the F.D.A. Citing a McKinsey email, Ms. Healey noted that McKinsey worked with drug companies in 2008 to “band together” to stave off proposed safety requirements on opioids, including Purdue’s OxyContin. She also referred to internal documents showing McKinsey’s relationship with the F.D.A. “would benefit Purdue and its bottom line.”
Ms. Maloney asked Mr. Sternfels how much McKinsey had made from advising Purdue, a figure available from the documents the firm had handed over to Ms. Healey’s office.
“Congresswoman, I don’t have that number today; if that’s of interest, I’m happy to dig that up and come back to the committee,” he said. She then asked Ms. Healey, who replied: $86 million.
Ms. Maloney also said she would introduce legislation to require more stringent standards by the agency overseeing rules governing conflicts of interest in federal contracting. A similar bill this month was introduced in the Senate.
As the hearing drew to a close, Representative Gerry Connolly, a Virginia Democrat, asked Mr. Sternfels about a slide from a presentation McKinsey had prepared for Purdue in 2013. It described a system of incentives for sales representatives that included a “cash prize” and “celebrity status,” with images of Donald J. Trump and a man in a suit fanning a stack of cash.
In 2013, McKinsey advised Purdue Pharma, an opioid maker, on how to incentivize its sales representatives.Credit…no credit
“Mr. Sternfels, 600,000 Americans are dead,” Mr. Connolly said. “Many people are still struggling with addiction. Do you have any regret you want to share with the committee?”
Mr. Sternfels replied: “I regret that we didn’t act sooner, sir. If I could play this over, I would have put the client protocols in a decade earlier. I would have reached a settlement even faster, and we would have pivoted from serving the manufacturers despite whatever goals there were, and I’ve already apologized for that, to actually being part of solution.”
Ms. Tlaib, the Michigan Democrat, was not satisfied, comparing McKinsey’s work to that of drug traffickers.
“While McKinsey was celebrating its blood money, communities were being torn apart,” she said. “Y’all may be wearing suits and may be having these fancy offices, but you’re doing the same freaking thing.”
Republicans on the committee played little to no role in questioning Mr. Sternfels. They said the hearing’s focus was misdirected and should have centered on what they described as a more pressing issue: the trafficking of fentanyl across the southern border.