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 advised opioid makers and their regulator, the Food and Drug Administration, possessed a conflict of interest. On that front, he insisted, McKinsey had been “transparent.”
“McKinsey did not – did not – serve both the FDA and Purdue on opioid-related matters,” Mr. Sternfels told the committee. “As both McKinsey and the FDA have made clear, our work for the FDA 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’ve seen in my years in government.” She has been in Congress for almost three decades.
“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 the new FDA 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.
“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 FDA since 2010. Even as McKinsey served FDA 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 FDA
On April 5, a group of Senate Democrats sent a letter to the inspector general of the Health and Human Services Department, which oversees the FDA, 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 FDA, 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 FDA, 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.
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 FDA Citing a McKinsey email, Ms. Healey noted that McKinsey worked with other companies in 2008 to “band together” to put off proposed safety requirements on opioids, including Purdue’s OxyContin. She also referred to internal documents showing McKinsey’s relationship with the FDA “would benefit Purdue and its bottom line.”
Ms. Mr. Maloney asked 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.
“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 be part of a solution. ”
Ms. Tlaib, the Michigan Democrat, was not satisfied, comparing McKinsey’s work to that of drug traffickers.
“While McKinsey was celebrating her 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.