It seems someone woke up at McKinsey, the world’s most prestigious consulting firm, and decided it was time to change. McKinsey was a consultant to Purdue, the pharmaceutical company that produced OxyContin. Purdue is now in bankruptcy and owes $8.3 billion under a settlement approved by the bankruptcy court.
Reports emerged last month that indicated McKinsey had advised Purdue on how to “turbocharge” sales of OxyContin through a structured rebate program. Courtesy of the bankruptcy court’s document dump last week, we gain insight into McKinsey’s work as well as Purdue’s desire for sales. Together these two were Butch and Sundance — the ending was not going to be pretty for either.
The documents find you shaking your head. In the middle of a nationwide opioid crisis, there are PowerPoint slides on the rebate program that showed how to use higher rebates for higher strength prescriptions. Using the soft language of “innovative contracts” to describe these pay-to-prescribe programs, it’s as if the two parties were weighing the benefits of consumer coupons on Uncrustables. These were amoral technicians at their best.
Both current and former McKinsey employees are calling for everything from remediation to reform. Walt Bogdanich and Michael Forsythe, “Rare Apology by McKinsey for OxyContin Work,” New York Times, December 9, 2020, p. B9.
Even the remediation, i.e., apology, was pitiful. A McKinsey spokesperson went to great lengths to emphasize that the rebates were not intended to boost sales. That claim contradicts every slide in the 41-slide deck. See the slides here for yourselves. https://beta.documentcloud.org/documents/20421781-mckinsey-docs.
And where were these McKinsey righteous dudes and dudettes when we had the great conflicts of interest issues as McKinsey was recommending bankruptcy plans that favored the companies in which their retirement plan held investment? Oh, that’s right — no conflict there because those working on the bankruptcy plans could not be expected to know where their retirement funds were being placed. Then there was the infamous PowerPoint slide presented to Boeing on how to get mine ownership in India. Here was the catch-phrase on what would be required to get the mine: “respect traditional bureaucratic process including use of bribes.” Walt Bogdanich and Michael Forsythe, “How a PowerPoint Slide Tangled McKinsey in a U.S. Bribery Case,” New York Times, December 31, 2018, p. A1.
Scroll back through the work on this site — there were plenty of warnings provided here for a firm that did not understand the role of ethics in business. One McKinsey executive noted, “While we can’t change the past, we can learn from it.” There is nothing in McKinsey’s work or its feeble apology that shows any such activity is in its tool box.
About mmjdiary
Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD.
The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards.
Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio.
She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News.
In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles.
Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
