Nothing to see here? Consultant advises drug makers - and their regulators

Patrick Malone & Associates P.C. | DC Injury Lawyers
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Patrick Malone & Associates P.C. | DC Injury Lawyers

When Big Pharma gets jammed up by federal regulators overseeing what may be risky prescription drugs, what to do? How about hiring the help of a powerful, secretive business consulting company — which also happens to be advising the feds on how best to regulate drug companies?

That’s the gist of yet more disturbing findings about McKinsey and Co.’s sketchy dealings with Big Pharma and now the federal Food and Drug Administration.

The corporate consulting titan, though it was required to do so, failed over a decade to formally disclose its work for drug makers, including those involved in the opioid abuse and drug overdose crisis, at the same time as it won big contracts with the FDA, according to excellent digging by ProPublica, a Pulitzer Prize-winning investigative site.

McKinsey’s defense? Everyone knew its clients included Big Pharma firms, so what? The company insists it kept its different clients’ interests separate. That is a dubious argument, worth dismissing on its face, ethics experts told ProPublica, which, for example, quoted Charles Tiefer, a professor of government contracting at the University of Baltimore Law School:

“For a contractor like McKinsey not to disclose the companies it is working for has all the appeal of the Addams Family on Halloween hiding Uncle Fester in the basement so as not to scare the neighborhood.”

Ian MacDougall, reporting for ProPublica, found real-world evidence of McKinsey’s clashing interests, not disclosed until it became public in a separate legal action against Purdue, the disgraced manufacturer and promoter of OxyContin. Critics say Purdue provided a template for bad behavior that led to the crisis that started with prescription painkillers and resulted in the addiction, debilitation, and deaths of hundreds of thousands of Americans over a decade:

“In one instance in 2008, which surfaced in a lawsuit against Purdue, the FDA told Purdue that it planned to require the company to submit a drug-safety plan for its best-selling drug, OxyContin. The company recognized that regulation of this sort threatened to cut into its sales margins, and according to McKinsey documents filed in federal court, top Purdue executives tasked the consultancy with devising a response to the FDA. According to McKinsey PowerPoint slides, the firm proposed four options, among them suing the FDA to ‘delay’ the imposition of a safety plan and to ‘band together’ with other opioid producers to ‘formulate arguments to defend against strict treatment by the FDA.’ Purdue selected the latter, with McKinsey helping to implement the strategy. In 2009, McKinsey emails and slides show, its consultants prepared Purdue executives for at least two meetings with FDA officials. (One suggested answer to questions about who at Purdue would take personal responsibility for OxyContin overdoses: ‘We all feel responsible.’)”

This was not a singular instance, MacDougall found:

“A number of other McKinsey projects at the FDA, contracting records show, were also likely to have a financial impact on its pharmaceutical industry clients. In 2010, for example, the FDA hired the firm to help it develop a system to track and trace the distribution of potentially harmful prescription drugs. The contract required the firm to consult with ‘supply chain stakeholders,’ a category that potentially included a number of long-standing McKinsey clients. Another contract, from 2014, tasked McKinsey with assessing the ‘strengths, limitations and appropriate use’ of Sentinel, a system meant to monitor the safety of drugs once they’re on the market. That project likewise called for McKinsey to interview ‘external stakeholders,’ including ‘industry organizations’ and ‘drug and device industry leaders.’”

ProPublica has found that the FDA has not flinched over McKinsey’s dual roles. The agency in 2019 renewed the company’s consulting contracts worth tens of millions of dollars.

Congressional oversight committees, however, continue to dig into potential improprieties. And the issue already has cost McKinsey — in dollar and reputational terms, MacDougall reported:

“McKinsey’s extensive opioid company consulting eventually began coming to light, starting with a 2019 ProPublica report. The firm’s opioid work has provoked widespread criticism, spawned a welter of lawsuits, and led the firm to pay nearly $600 million this year to settle legal claims made by all 50 states, as well as five U.S. territories and the District of Columbia. It also prompted McKinsey to issue a statement in which the firm acknowledged that it ‘fell short’ of its standards in advising opioid makers while also denying that it ‘sought to increase overdoses or misuse and worsen a public health crisis.’ The firm pledged not to work on opioid-related projects going forward.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them by dangerous drugs.

The opioid crisis, which we now must tackle in the most aggressive way possible, took time to develop, fostered by Big Pharma, doctors, nurses, hospitals, insurers, and others in health care. The wrongdoers must be held accountable, and the tens of millions who have been injured must find care — and justice from the injuries they and their loved ones suffer.

Here’s hoping that the FDA, especially if prodded by its overseers on Capitol Hill, re-examines its relationship with McKinsey and ensures that no consultant or company flouts or ignores federal contracting and procurement laws and regulations. As ProPublica also reported of McKinsey:

“In government consulting [as opposed to work in the private sector] … the [disclosure and conflict-of-interest] rules are far more stringent, and on several recent occasions, the firm has been caught refusing to abide by such strictures, including disclosure rules. Over the past couple of years, for example, McKinsey’s bankruptcy-advisory practice has paid more than $30 million to the Justice Department and one client’s creditors to settle allegations that it failed to disclose potential conflicts, as required by the federal bankruptcy rules. Those allegations also prompted a federal criminal investigation of the firm. McKinsey has denied wrongdoing, and the investigation, which came to light in 2019, has not led to charges.”

We’ve got a lot of work to do to tamp down the opioid crisis — and to ensure that the federal watchdog charged with helping to do is not hindered in any way by any company it hires for assistance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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