McKinsey & Company worked for the Food and Drug Administration. It also worked for Purdue Pharma and other opioid manufacturers. On April 27, 2022, the firm’s global managing partner appeared before House Oversight alongside two state attorneys general who had investigated it. He opened by disputing the committee’s own staff report.
The apology, and the objection
SternfelsThe staff report has additional flaws. It looked at a time period of the work without examining the nature of the work. It implied incorrect conflict standards and it took large speculative leaps to reach unwarranted findings.
SternfelsAs one example, the staff report incorrectly said McKinsey shared confidential FDA information with its private sector clients. In fact, the referenced content was publicly published by the FDA more than eight months earlier.
SternfelsMadam Chairman, we fully recognize--fully recognize the terrible consequences of the opioid epidemic. We have acknowledged our role in serving opioid manufacturers and we apologize for that work.
SternfelsWe have been committed to being part of the solution, including funding and a settlement that provides more than $575 million to prevention, treatment, and recovery efforts.
[Hearing transcript, April 27, 2022, opening statement of Bob Sternfels.]
What the firm was selling
Massachusetts Attorney General Maura Healey had sued the Sacklers. She described what she found McKinsey telling Purdue.
HealeyMcKinsey went so far as to brag about this. They wrote to Purdue's CEO that Purdue should hire McKinsey because of, quote, "who we know," close quote, including, specifically, because McKinsey worked for the FDA.
HealeyWe found that McKinsey did not want the world to know what it was doing. When I sued the Sacklers, McKinsey consultants read about my investigation and lawsuit and actually planned to delete their documents and emails. They wrote that they were going to destroy the evidence because, quote, "someone might turn to us," close quote.
HealeyI wasn't about to let them get away with that. I worked with attorneys generals from both parties to secure a national resolution that made McKinsey pay for its misconduct, forced McKinsey to change its practices, and required McKinsey to turn over its documents to the public for all to see.
[Hearing transcript, April 27, 2022, statement of Attorney General Maura Healey.]
Both sides of the trade
Representative Johnson put the arrangement to Sternfels directly.
JohnsonSo, isn't it a fact, though, Mr. Sternfels, that while your company was receiving money from the Federal Government that it failed to disclose to the Federal Government that it was also taking money from the pharmaceuticals? Isn't that correct?
SternfelsI think that is incorrect, Congressman, with respect. We made very clear that we were working both with the industry and with opioids, in particular.
JohnsonFrom day one with the Federal Government you are contending that McKinsey let the government know that it was also taking money from the pharmaceutical industry?
SternfelsI will figure out if it is from day one.
JohnsonFrom the opioid industry, actually.
SternfelsAnd, Congressman, if the first date is of interest, I will find that. I looked for total references and there is many.
JohnsonAnd do you believe it is proper for a company--a private company--to contract with the taxpayers of America through the Federal Government for money to advise the Federal Government on how to combat the opioid epidemic while at the same time taking money from the opioid industry to help them turbo charge profits? Is that right?
SternfelsI would not--sir, I 100 percent agree that would not be appropriate. Our work for the Federal Government was not specifically focused on combating the opioid epidemic, and if we were working that exact issue on both sides that would be a conflict of interest. Hundred percent agree.
[Hearing transcript, April 27, 2022, questioning by Rep. Johnson.]