Ottawa to join B.C. class action accusing McKinsey of ‘reckless’ opioid marketing

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Ottawa is planning to join a B.C. class-action lawsuit that accuses McKinsey & Co. of engaging in reckless marketing campaigns to boost opioid sales, placing the Liberal government at odds with the global consulting company it has relied on for more than $100-million in contract work since 2015.

The class action was first filed by the government of British Columbia in late 2021 and the province approved legislation late last year that would allow the federal government to join.

In a statement to The Globe, the office of federal Mental Health and Addictions Minister Carolyn Bennett said the process to certify the lawsuit is scheduled for next year. “Should the class action be certified, the federal government will also formally become a class member in it,” the minister’s office said.

Ottawa’s decision to join the lawsuit means it is effectively endorsing a heavily critical assessment of McKinsey’s corporate behaviour, as laid out by B.C. in court documents.

“McKinsey has created or assisted in the creation of an epidemic of addiction in British Columbia and throughout every province and territory in Canada,” the statement of claim alleges. “The actions of McKinsey have caused deaths and serious and long-lasting injury to public peace, health, order and safety.”

The Globe has reported that the total value of federal contracts awarded to McKinsey since 2015 is at least $116.8-million, spanning several federal departments. The company has said in court filings that its contracts with the federal government make up as much as 10 per cent of its gross revenue in Canada.

“It is utterly absurd that this Liberal government paid over one hundred million dollars to a consulting firm it is simultaneously suing,” said Conservative MP Garnett Genuis in a statement. The government recently indicated its support for the B.C. lawsuit in a written response to a petition that Mr. Genuis filed on behalf of Canadians concerned about prescription drug addiction.

Mr. Genuis said Prime Minister Justin Trudeau and his ministers have repeatedly defended federal contracts with McKinsey in response to opposition concerns about the company’s links to the opioid crisis.

“The Liberals turned a blind eye while sending millions of dollars to a firm that was feeding the opioid crisis,” he said, adding that a Conservative government would drop McKinsey consultants and support a lawsuit against pharmaceutical companies connected to opioid sales.

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.

Opioids can be prescribed by doctors to relieve pain, but can also lead to addiction. Black market or street versions of more potent opioids such as fentanyl are an increasing source of opioid deaths.

The federal government’s support of “safe supply” programs aimed at providing legal fentanyl alternatives for drug users has increasingly become a politically charged debate topic in the House of Commons, where Conservative Leader Pierre Poilievre has accused the Liberal government of worsening the crisis.

“People are dying because the minister and the Prime Minister are flooding the streets with dangerous drugs and killing these people,” Mr. Poilievre said in the House Wednesday.

Dr. Bennett, the Liberal addictions minister, accused the Conservatives of “speaking nonsense” and embracing “the failed ideology of the past.”

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.

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.

The province said it was the largest settlement of a government health claim in Canadian history.

Purdue was 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 to formally join that lawsuit if it is certified.

The consulting company 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.”

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.

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.

During a hearing last week, Mr. Genuis asked McKinsey senior partner Robert Palter about the company’s 2021 settlement worth nearly US$600-million with U.S. governments related to the company’s past advisory work for opioid manufacturers.

“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.”