Global consulting giant McKinsey & Co., under the leadership of Dominic Barton, pitched Purdue Pharma (Canada) in 2014 on how it could more aggressively market and boost sales of OxyContin and other highly addictive opioids to Canadians, according to a confidential memo obtained by The Globe and Mail.
McKinsey & Co. is facing a class-action lawsuit from the B.C. government, which Ottawa plans to join, that accuses the firm of engaging in reckless marketing campaigns to boost opioid sales, placing the Liberal government at odds with a company it has relied on for more than $100-million in contract work since 2015.
Mr. Barton became a pro-bono economic adviser to Prime Minister Justin Trudeau when the Liberals formed government in 2015 and was later named Canada’s ambassador to China in 2019. Since 2015, the total value of federal contracts awarded to McKinsey has risen to at least $116.8-million, spanning several federal departments. McKinsey has said in court filings that its contracts with Ottawa make up as much as 10 per cent of its gross revenue in Canada.
In recent testimony before parliamentary committees examining those contracts, Mr. Barton, who resigned as envoy to Beijing in December, 2021, to become chairman of Rio Tinto, and Robert Palter, managing partner of McKinsey’s Canadian office, stated the consulting firm has done “no opioid sales and marketing in Canada.”
What the two men did not mention was that McKinsey pitched Purdue Pharma (Canada) to do exactly that on March 18, 2014. A McKinsey memo to Purdue, titled Identifying Growth Opportunities in Canada, states: “We appreciate your interest in driving sales growth and look forward to supporting you.”
The memo to Purdue Pharma (Canada) president Craig Landau went on to say McKinsey was seeking to identify three to five near-term “revenue acceleration activities” for the 2014-2015 period.
It described how McKinsey could help Purdue determine whether there are opportunities to “better target and reach high-potential prescribers” and increase the motivation of Purdue’s pharmaceutical sales representatives by analyzing “what opportunities exist to change incentive compensation to better align the sales force goals to company objectives.”
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The Globe and Mail obtained the memo and other records from the Opioid Industry Documents Archive, a searchable online collection of 1.5 million documents collected as a result of litigation against the U.S. pharmaceutical industry. The archive at the University of California, San Francisco and Johns Hopkins University includes more than 114,000 documents from McKinsey, which consulted on opioid sales and marketing for Purdue Pharma in the United States.
Other documents from the archives show e-mail exchanges in December, 2015, between McKinsey consultant Ankit Saxena and Purdue Pharma (Canada)’s then-director of finance Rajeev Bhatt in which they discuss a 2020 gross sales forecast for products such as OxyContin, Codeine Contin, OxyNeo and Hysingla as part of a “strategic evaluation.” There are also documents dated as far back as 2013 when McKinsey consultants talk about working with Purdue, shortly after Mr. Landau took over as Purdue Pharma (Canada) CEO.
In an October, 2013, e-mail from then-McKinsey consultant Pasha Sarraf to a colleague, he explained that he had spoken to Mr. Landau, who was seeking advice, and noted Purdue is “getting hammered on market access to Oxycontin NEO.” OxyNEO had recently been introduced to the Canadian market and was a reformulated version of OxyContin where the pills are harder to crush – making it more difficult to abuse the drug by chewing, injecting or snorting it.
Alley Adams, head of communications and external relations for McKinsey & Co. Canada, said the company never ended up doing this work for Purdue Pharma (Canada).
“Consistent with our testimony, McKinsey and Company did not do any opioid sales and marketing work in Canada and it would be false to state otherwise. As is abundantly clear from the document itself, this was a proposal,” Ms. Adams said in an e-mailed statement to The Globe. “No work ever took place as a result.”
The 2014 memo outlines a similar strategy proposed by McKinsey to supercharge sales of opioids in the United States. In 2021 McKinsey agreed to pay US$573-million to settle investigations in U.S. states over its consulting work related to sales of opioids. Mr. Barton, who left McKinsey in 2018, has said he was unaware of the consulting firm’s role in advising a U.S. drugmaker to bolster sales of OxyContin, the highly addictive painkiller that contributed to tens of thousands of deaths in Canada and the United States.
Mr. Barton told The Globe in 2021 that it was personally upsetting to learn McKinsey was providing advice to Purdue Pharma on tactics to drive sales of OxyContin, and that he understands the damage caused by opioid misuse.
Mr. Barton did not respond to a request for comment for this story.
More than 34,000 Canadians have died from opioids between January, 2016, and September, 2022, according to federal government data. Over the first nine months of 2022, there were approximately 20 deaths per day, double the 10 deaths per day in 2019 prior to the COVID-19 pandemic.
During a parliamentary hearing in May, Conservative MP Garnett Genuis asked Mr. Palter about McKinsey’s 2021 settlement.
“Your position is what? That in spite of paying over a half-billion dollars in compensation in the United States, you think there was no wrongdoing?” Mr. Genuis asked.
“McKinsey’s settlement with the United States had no admission of wrongdoing,” Mr. Palter replied. “We did nothing illegal.”
In 2022, Purdue Pharma (Canada) agreed to a $150-million settlement with all federal, provincial and territorial governments related to its role in marketing opioid-based pain medicine north of the border.
Purdue is just one of more than 40 pharmaceutical companies that B.C. is pursuing in a separate class action. An application to have that lawsuit certified will be before the B.C. Supreme Court this fall. The federal Addictions Minister’s office told The Globe that Ottawa also intends formally to join that lawsuit if it is certified.
McKinsey has rejected the allegations against it via court documents filed in February of this year. The company says the plaintiff – the B.C. government – has provided “insufficient material facts” to support its case.
“McKinsey is not a manufacturer or distributor of opioids,” the company responds in the documents. “The plaintiff has not alleged material facts necessary to connect McKinsey to any wrongdoing because there is no meaningful connection between McKinsey and the opioid crisis in Canada. For this reason alone, the entire claim should be struck.”
A recently amended version of B.C.’s statement of claim against McKinsey accuses the consulting company of causing Canadian deaths through its past marketing advice to pharmaceutical companies.
The suit states that McKinsey has had a relationship with Purdue Pharma, the makers of opioid drug OxyContin, since at least 2004. In May, 2007, the drug maker paid US$600-million in criminal and civil settlements related to its opioid-related activities and three company executives pleaded guilty to misbranding charges.
B.C. alleges McKinsey consultants designed and implemented plans to market and promote opioid sales in Canada, “despite McKinsey’s knowledge that opioids were addictive and were being aggressively promoted to treat conditions that opioids are not effective in treating.”
The claim accuses McKinsey of working with opioid manufacturers to target physicians with marketing calls and lobbying pharmacies to increase sales, among other “false, reckless, and deceptive marketing campaigns.”
“McKinsey’s conduct assisted in creating an oversupply of opioids available for criminal and illicit use and fuelled a new wave of addiction, dependence, abuse, and injury,” the B.C. claim states.
None of the allegations have been proven in court.
Several parliamentary committees have been studying the relationship between the federal government and McKinsey to determine why federal contracting with the consulting firm has increased steadily from nearly zero since the Liberals formed government in 2015.
In the early years of the Liberal government, Mr. Barton acted as both the head of McKinsey and the chair of former finance minister Bill Morneau’s advisory council on economic growth. The council was supported by McKinsey staff and made several major policy recommendations, many of which were enacted by the government to at least some degree.
Government and McKinsey officials have generally responded by saying it is part of a broader trend in favour of using consultants. The federal government has recently said it is reviewing its approach to consulting and will be looking to find savings in that area.
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