McKinsey and OxyContin

I had no idea bout this story because normally don't pay attention but thanks to Victor Cheng I learned about OxyContin and McKinsey. Can't post links but google New York Times article from 2021/02/03 about Mckinsey opiods settlement or any other source.

Cheng describes it pretty well actually and denounces McKinsey. What struck me is that he is probably right because McK run the analysis and knew the possible outcomes but still decided to accept the business knowing they gamble on human lifes even after Pardue pleaded guilty in court. Plus McK haven't admitted wrondoing, just gave away cash as a result of the settlement.

I am not going to apply for a job with McK(1st year at target school). Yeah I know it is cool etc but brand name will be affected and I dont want to be associated with it. What is your takeaway? Will it harm the reputation in the long run in the eyes of MBA adcoms and clients in part due to social justice trend?

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Comments (53)

Controversial
Feb 17, 2021 - 10:13pm

you might as well blacklist every large financial services company if you don't want to be associated with a company that has done something unethical before

Feb 19, 2021 - 6:07am

famejranc

you might as well blacklist every large financial services company if you don't want to be associated with a company that has done something unethical before

Idk why you're getting MS. You're right. 

In fact, most companies in all industries have done something unethical at some point.

Even the ones that live and die for ESG and CSR related causes aren't free from this. Heck even benefit corporations (whose official and legal corporate objectives are to maximize social benefit not profit) like Patagonia engaged in unfair labor practices or sourced materials produced using unfair or possibly forced labor.

It's impossible to enjoy the fruits of modern civilization without buying from some company or someone who wasn't involved in unethical activity. 

Most Helpful
Feb 20, 2021 - 4:55pm

It's not about "something unethical." It's not one thing. It happens over and over at McK.

I'm no longer at BCG, but when I was I thought about this question a lot. Do a Google search for "BCG partner prison" and then do the same for McKinsey and see for yourself how big the difference is. Why is that? It's not because BCG hires better people than McK does. We all recruited out of the same pool, for the same job, and trained people to do it pretty much the same way.

It comes down to culture. I have absolutely no doubt that if BCG had done that work, some PL might have written some of the slides that the McK team ultimately delivered, with some of the same ideas on them. We definitely had BCG PLs that were business school classmates with the McK EMs who actually wrote those pages. So why doesn't BCG suffer from scandals like that? It's because BCG partners were taught, over and over again, that no one project is worth risking the firm. So while I definitely believe that there might have been BCG PLs who would have written that, I know that such a slide wouldn't have gotten past 2 BCG partners. Someone would have raised the flag and said "hey, we can't say this". The lesson of Purdue, and Valeant, and Eskom and Galleon and heck Enron is that McK doesn't have the same kind of culture.

The interesting takeaway for me is that I'm not sure BCG will have the same culture either, in 10 years. Where in the old days the firm was built around small projects and the loss of any one project or client relationship wasn't going to blow up the business, as BCG increasingly does transformational work that dynamic is changing. I personally know of a case where a BCG SME sexually assaulted another BCGer, and when leadership found out the first response was "shit, again?". Turns out that SME is critical to a 9-figure project so they tried to bury the issue the first time. That never would have happened in the BCG I grew up in, we threw people out at the first hint of something bad going on (not that that was the right thing either - lots of people didn't get the benefit of the doubt when they should have, I'm just saying it used to be the other way around).

I wonder how long it'll be before BCG starts showing up in the headlines. With the way the culture there is changing, it's likely going to happen. BCG wants to be more like McK, the firm has a super weird inferiority complex about it though they'd never admit it. For good and bad both, BCG is getting to be more like McK every day.

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Feb 18, 2021 - 12:33am

Hurt reputation with clients? Maybe. Hurt reputation with MBAs? Definitely not. The type of people that would find the Opioids scandal repulsive would not be a good fit for Mckinsey anyways. That being said, the $600M fine is nothing to scoff at. 

Feb 18, 2021 - 9:14am

> The type of people that would find the Opioids scandal repulsive would not be a good fit for Mckinsey anyways

What a ridiculous thing to say. Yes, McKinsey has had some really bad actors do really bad things, but to assume that is generalizable to the people who work there doesn't make sense at all. At least at my school, the people who went to McK were some of the most social-impact driven people I've met

Feb 18, 2021 - 9:34am

I am not saying that everyone who works at Mck is guilty or complicit. However, this opioid case is not the first, won't be the last, and probably not even the worst scandal for Mckinsey. People that decided to work for them despite knowing about these types of projects (and in all likelihood, the opioid case is only the tip of the iceberg) likely don't have positive social impact at the top of their value chain. 

  • Prospect in IB-M&A
Feb 19, 2021 - 12:26pm

Yeah lets be honest. These people are "social impact driven" people because they are virtue signaling to the world that they really care about XYZ issues. Their action to choose McKinsey decidedly proves that they prioritize career development over social impact. This is a choice many people make but please don't kid anyone

Feb 18, 2021 - 8:02am

It is obvious OP will be downvoted by McKinsey consultants who see nothing  wrong about feeding ppl drugs when there are deaths and lawsuits already. Pure greed. I hope 600 mil is just a beginning and there will be more lawsuits. If there would be nothing wrong with it they would keep those two. There is a criminal case against Dr.Ghatak and Elling though

Feb 18, 2021 - 8:44am

EDIT: Turns out if you write too abstractly, most people don't know WTF you're talking about. So here's what I'm really saying. 1) Scandals don't always represent the entire organization, but perhaps just a part of the organization. 2) If you want the comforts of modern civilization, you can't escape buying from companies doing something unethical. Every company has probably done something wrong. 3) That's kind of how the world works, which also applies to people. Even the saints have a dark side.

EDIT 2: I gotta stop taking so much CBD man. The line btw super abstract expression and concrete statements are getting blurry.

It's important to note that whatever a particular organization did doesn't fully represent that entire organization and everyone in it. 

After all McKinsey is a partnership and it might be just the fault of a particular partner(s) involved in this, not the entire organization. 

Another point is if you start going down the list of companies (not just companies, but also people and governments) who have done unethical things then you you're going to find that every single company in the world has done something bad. Just to give you examples, most electronics use materials that were mined using slave labor. Even "benefit corporations" like Patagonia isn't innocent when it comes to forced labor amd mistreatment issues. Only way to be free from all these issues is to do everything yourself, which is impossible unless you live in the wild.

The world is a complex place and nothing is just good or evil. Another example, Ghandi was racist against Black people and was a Hindu-supremacist who believed in the Caste System. 

Define/discover your own ethical principles and focus on trying to meet those. Otherwise, you're just going to end up as a triggered, entitled, and hypocritical brat. 

Feb 19, 2021 - 4:20am

Looks like you completely missed the point.

I'm just explaining that refusing to apply to /buy products from certain companies is often hypocritical because every company at some point has done something wrong. And then I broadened that point and claimed that's the way world is: All organizations and all people, even the "saints", have a dark side. 

So it's nearly impossible to be consistent with some moral code unless you do everything by yourself and never buy anything from anyone.

Was it too abstract for you? Too philosophical?

If you are an academic type like I am, sometimes you forget that most people are unfamiliar with abstract thinking so maybe it's my fault. 

Feb 19, 2021 - 10:47am

Look it is just wrong to compare Ghandi with McKinsey. You don't compare apples to oranges. My mother was spanking me when I was a child. Oh no! My mother is as bad as McKinsey. Don't even go there. Oxycontin problem happens NOW and HERE. It is not 500 or 50 years ago in Europe or Asia.

No other western company prohibited its employees from participating in uprisings in Russia against Navalny imprisonment (not that I support those protests). Except McKinsey's Russian partners. Why? They do tons of work for Kremlin and Russian government. I bet they do it in China too. They kneel for blk ppl in the US but will never do it in China and will never open their mouth to mention Uyghurs. It is the whole model not just some bad partners. A few bad apples will eventually spoil the basket full of good apples. 

Feb 24, 2021 - 8:50pm

wild wild west

Look it is just wrong to compare Ghandi with McKinsey. You don't compare apples to oranges. My mother was spanking me when I was a child. Oh no! My mother is as bad as McKinsey. Don't even go there. Oxycontin problem happens NOW and HERE. It is not 500 or 50 years ago in Europe or Asia.

No other western company prohibited its employees from participating in uprisings in Russia against Navalny imprisonment (not that I support those protests). Except McKinsey's Russian partners. Why? They do tons of work for Kremlin and Russian government. I bet they do it in China too. They kneel for blk ppl in the US but will never do it in China and will never open their mouth to mention Uyghurs. It is the whole model not just some bad partners. A few bad apples will eventually spoil the basket full of good apples. 

Hey all I'm saying is that people need to look at it objectively. I'm a bit of contrarian by nature so I like playing devil's advocate.

So here are more contrarian views.

Even in the case of Navalny and China, McKinsey hasn't come out saying they somehow support Putin or the terrible shit that China does. They're just keeping their mouth shut because 1) it's none of their business to do so, 2) they are being consistent with their values of supporting their clients regardless of whoever they are.

In a way there's something very professional about McKinsey and how they stay consistent with their own version of morality, which is to serve their clients no matter what regardless of who they are or what they do. The US has built statues of generals like Robert E Lee because of his values and consistency not because he fought for the Confederacy.

I'm not making any value judgements in how "good" McKinsey values are (in fact no one really has the right to unless you're Jesus). But at least they have a value system and they stick to it.

Compare that with companies shamelessly virtue signaling and promoting BS corporate culture and values they supposedly believe in but don't actually act on.

  • Analyst 1 in S&T - Equities
Feb 18, 2021 - 11:36am

How would this hurt them with clients/applicants? There are only so many useless firms a company can use to rubberstamp their ideas and obviously students will still apply. 

  • Prospect in IB - Gen
Feb 18, 2021 - 11:37pm

Aside from GS whose 1MDB scandal is equally repulsive to McKinsey's, banking is just a sales job I don't find see much of a moral dimension to it. McKinsey on the other hand profited directly from making the opioid crisis worse in the U.S., helped Saudi Arabia arrest and silence critics, and held a company retreat miles from Muslim detainment facilities in Xinjiang province. There's a difference between working at a company that sometimes does distasteful things and working for a company that systematically makes the world worse for profit.

  • Prospect in IB - Gen
Feb 19, 2021 - 1:09am

Dude I am not devoted to my industry like you are apparently. I fully acknowledge plenty of shitty things banks do, but M&A is relatively harmless and that's where most people in IB on this forum work. But even if we include these other functions, rigging LIBOR a few bps or spoofing commodities trades is really nothing compared to the shit I listed above.

Feb 19, 2021 - 9:04am

I don't think you need to be "devoted" to your industry to know a bit of history about y'know the Global Financial Crisis. It was only 10 years ago or so and was pretty bad, trust me!

And as someone who used to read this sub during the crisis it was AMAZING the magical thinking of the IB types dismissively condescending to anyone who dared tried to blame them for having any fault in crashing the economy. It was all the fault of the poor minorities that took out loans that were too big! 

At least consultants on here are acknowledging that what McK did was bad. Definitely some asymmetry in response lol

  • Associate 2 in PE - LBOs
Feb 19, 2021 - 3:25am

So you help creating a OD epidemic by knowingly pushing a bunch of opioids to the underprivileged and your primary reaction is to say "but what about them"? I think that says enough

Feb 19, 2021 - 11:39am

I actually didn't even work in consulting at the time and have never worked on anything related to pharma. Any other dishonest ad-hominem you'd like to sling?

And pointing out the shameless hypocrisy of people pearl-clutching and moralizing when they work in industries that melted down the economy in 2007-8 or routinely hollow out businesses, load them up with debt, fire long-time employees and torch their pensions for a few bucks isn't whataboutism. 

glass houses and all that

Feb 28, 2021 - 9:28am

I'm not going to argue over which was better or worse but you don't get to act like a sanctimonious prick and moralize to consultants about how evil their job is when people in your industry crashed the economy and caused untold misery on many millions of people all over the world who lost their jobs, homes, pensions etc. 

Especially when most bankers on this site and elsewhere in 2007 and onward have refused to acknowledge and role of IB or wall street played in the great recession. Again, notice how many consultants are on here defending the Oxy scandal? Almost no one...

  • Prospect in IB - Gen
Feb 28, 2021 - 10:30am

I'm not moralizing generally about consulting. Nothing against consulting. I'm just saying this one very specific incident is pretty messed up.

  • Associate 3 in ER
Feb 19, 2021 - 10:11am

They deserve to be criticized for what they did. The fact that posters here don't pass your arbitrary ideological purity test is irrelevant to McKinsey's role in exacerbating the opioid crisis.

Feb 19, 2021 - 6:23am

Here's another perspective.

What if that pharma company already made up its mind to sell Oxy to bunch of people? What if the downside was that McKinsey might have had lost not just 1 client but many more if they were to drop this case? 

If you drop a client for "ethical" issues and every other one of your clients have similar ethical issues, what can you really do? Risk the jobs and livelihoods of thousands in your community (the McKinsey community) or maybe harm some people you've never ever met before and will never meet? 

Not trying to defend McKinsey or justify what they did (someone in McKinsey responsible for this should probably go to jail or at least be heavily investigated). But trying to break out of group think and offer different perspectives.

Like I keep saying, things are A LOT more complex than they seem. So you really have to think about your own ethical priorities and be principled when you're making decisions like where to work for, who to buy from, who to sell to, etc...

  • Associate 3 in ER
Feb 19, 2021 - 8:31am

McK weren't a passive observer in this scandal, and I think it is disingenuous to suggest that consulting companies need to completely shed their moral compass in order to potentially protect their own headcount. It's really not that complex - they pushed aggressive marketing tactics and were aware that opiates killed people. 

  • They proposed an initiative called "Evolve to Excellence" to Purdue, "through which Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing '25 times as many OxyContin scripts' as their peers, causing health care providers to prescribe opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion." - direct quote from the DOJ settlement (source). The WSJ report directly implicated McK in creating this initiative (source). 
  • They proposed offering a rebate to the pharmacy companies every time one of their customers overdosed on opiates. "It projected that in 2019, for example, 2,484 CVS customers would either have an overdose or develop an opioid use disorder. A rebate of $14,810 per "event" meant that Purdue would pay CVS $36.8 million that year." - from NYT article (source).

As a blanket response to the whataboutism - I understand that other companies/industries also do bad things but that doesn't excuse McK from their role in the opiate crisis. 

Feb 19, 2021 - 12:08pm

I think you made a very valid point. My best guess is this is exactly what happened within Mckinsey when making these decisions. Mckinsey reputation for sidelining morals (and laws) is not a secret. Companies like Purdue choose to hire Mckinsey - specifically so that they can get recommendations that are in-line with maximizing profits, without having to care about morality or ethical dilemmas. This is also why I think the damage to Mck's reputation is often overstated.

A more extreme comparison is like publicly condemning the triads for human trafficking. Sure there might be some bad press etc. but in the end, people will still pay the triads for business. Recruits will still join since that's exactly what they are looking to get into. Again, clients don't hire Mckinsey to help make morally-correct decisions and fresh MBAs don't join Mckinsey to end poverty or cure cancer. 

Feb 24, 2021 - 9:01pm

Exactly.

This is why I try not to blame anyone or any organization because ultimately that clouds the underlying problems - that the entire incentive structure is often misaligned. 

It's easy to pass moral judgements but not morality is such a subjective thing and true impacts are difficult to measure (what if the money made by getting people hooked on Oxy ended up being spent for good causes that saved more lives than it destroyed?). Of course, most modern humans would agree that it's morally wrong to knowingly harm a person. 

Still, setting the morality issue aside, the cult of "profit maximization" and incentive structures set around it probably not ideal as it creates damages to the environment, unprotected groups of people, and eventually instability through decrease in confidence of the "system". 

  • Analyst 1 in IB - Cov
Feb 24, 2021 - 7:17pm

LOL @ ppl who think this will end. The Senior Partners just ousted Kevin Sneader (global managing partner) because of his "blunt words" condemning the firm's wrongdoings. Read the WSJ article on this topic - it is quite informative.

Feb 25, 2021 - 1:18am

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  • Analyst 1 in IB - Cov
Feb 28, 2021 - 9:32pm

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