RI Cities and Towns Sue McKinsey — Allege RICO in “Opioid Marketing Enterprise”
Tuesday, October 04, 2022
Rhode Island cities and towns this week sued McKinsey, claiming the consultant “played an integral role in creating and deepening the opioid crisis.”
The lawsuit alleges that McKinsey “participated in and helped orchestrate a broad scheme to deceptively market opioids” - and “knew of the dangers of opioids and of Purdue’s prior misconduct, but nonetheless advised Purdue to improperly market and sell OxyContin.”
The State of Rhode Island, via Attorney General Peter Neronha, had already settled with McKinsey in 2021 for $2.59 million in a multi-state settlement for having “turbocharged” the opioid epidemic.
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GoLocal spoke with attorney James Peterson, who is based in West Virginia and is representing the plaintiffs.
“There’s never enough money to go around,” said Peterson, of the prior settlement with the states. “The money received by the [state] Attorneys General, they parsed it out to agencies who were assisting [with the opioid crisis response] and needed outreach."
“In most states, none of the money went to cities, counties and towns. They want money to take care of people in their own community," said Peterson of the plaintiffs who he represents.
Multidistrict Litigation
The 91-page lawsuit charges four counts — Racketeer Influenced and Corrupt Organizations (RICO); Public Nuisance; Civil Conspiracy; and Unjust Enrichment.
“Their sole goal was to up-sell the opioids….and they were obviously successful in selling death,” said Peterson, of McKinsey in its consulting for OxyContin maker Purdue Pharma.
“The allegations are they conspired together with Purdue to upsell [opioids] for profit — they wouldn’t have settled with the Attorney Generals otherwise,” said Peterson.
Peterson explained that the Rhode Island lawsuit is just one of a number across the country, and that it will end up in multidistrict litigation.
“No one wants to bankrupt the companies. You can’t live with drugs or without them, but you have to be a responsible citizen,” said Peterson.
Sacklers Tried to Separate Themselves From Purdue - Launched Company in RI
The lawsuit also states, "At the time Richard Sackler communicated these plans to distance the family from Purdue, the Sacklers had already established a second company, Rhodes Pharmaceuticals L.P. (“Rhodes”). The Sacklers established Rhodes four months after the 2007 guilty plea. Rhodes’ purpose was to sell generic versions of opioids. It was, in other words, a way for the Sacklers to continue to make money off of opioids while separating themselves from Purdue.
By 2016, Rhodes held a larger share of the opioid market than Purdue. Through Purdue, the Sacklers controlled 1.7% of the overall opioid market. When combined with Rhodes, however, the Sacklers’ share of the overall opioid market was approximately 6% of all opioids sold in the United States."
Rhodes was located in Coventry, Rhode Island -- see the GoLocal Investigation in 2018 into the company HERE.
The plant in Coventry has been sold. It is unclear what materials are now made at the facility.
The suit further claims that Purdue hired McKinsey to "Devise and Implement an OxyContin Sales Strategy Consistent with the Sacklers’ Goals."
"The Sacklers faced a problem: the need to grow OxyContin sales as dramatically as possible so as to make Purdue an attractive acquisition target or borrower, while at the same time appearing to comply with the Corporate Integrity Agreement. Purdue and the Sacklers were well aware of the constraints posed by the Agreement. Indeed, during a May 20, 2009 Executive Committee Meeting, the discussion led to whether Purdue should have a single sales force marketing all Purdue products, including OxyContin, or instead to 'create a separate Sales Force for Intermezzo (a sleeping pill) that would be comprised of approximately 300 representatives,'"according to the suit.
“We believe we have an extremely powerful case — something has to give,” said Peterson. “No company has enough to take care of these problems.”
McKinsey did not respond to request for comment.
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