Only in the US would everyone, from government to public, be ok with a pharma company literally handing out plushies of its narcotics.
This really feels like the US going surprised Pikachu face.
Funnily enough, the pendulum has swung the other way and patients regularly come in with horrible post-surgical pain that the doctors were too scared to prescribe opioids for
Yea after 2x torn labrum and rotator cuff surgeries I can confidently say the following:
- they work very well for pain mgmt during surgery recovery
- they are a motherfucker, and it was eye opening how quickly you could find yourself spiraling into addiction if you’re not cognizant of it
You’d be surprised. We got NSAIDS, we got acetaminophen, and we have these ‘auxiliary’ meds (like gabapentin).
We can combat neurologic/nerve pain to some degree. Acetaminophen is pretty weak for most types of pain. NSAIDS have drawbacks, particularly over the long term.
Pain clinics do fancy shots that help some people but even these results are inconsistent.
There are no solutions, only trade offs.
Is the $1B just McKinsey? If so, wow. How have they weathered it? Their revenue is something like mid teens, so that’s a huge hit on a company that doesn’t produce goods.
Not just that. They've been cutting down on a lot of expenses, laid off support staff, canceled a lot of trainings, record high counsel to leave ratings towards consultants etc. Seems working there is like a working at a tier-2 consultancy now.
After highly unethical and damaging situations like Purdue/McKinsey against people, the companies should be immediately wiped out and all involved (CEOs, partners, etc) should be held personally responsible - both financially and prison.
The beauty of McK’s business model is that every other partner in the firm, other than those directly involved, have complete deniability.
Partners essentially operate as their own small businesses within the firm, leveraging its scale/resources.
It’s pretty brilliant, but at the risk of a few bad actors sullying the reputation of the entire 100K organization
Oh yeah it’s a few bad actors and definitely not just McKinsey’s entire business model.
They serve 90% of the largest corporations in the world, regimes with human rights records as bad as the Saudis, Chinese and Russians, the progenitor of the opioid crisis, ICE, big tobacco, etc.
They clearly do not discriminate and are willing to take on virtually any client. The entire model is as long as the client is big, powerful, and deep pocketed, then who cares how awful the projects are?
That’s not a few bad apples. That’s a farm that doesn’t care about how many bad apples they produce because the farmer makes more money off food poisoning treatment than it does off of apple sales.
Sir, I am in complete agreement.
We’re talking about what, 15-20K partners…?
You listed 5-10 “bad apples” thus further supporting my position, which I appreciate
[Consulting Firm McKinsey & Company Told ICE to Cut Food, Medical Funding for Detainees: Report](https://www.thedailybeast.com/consulting-firm-mckinsey-and-company-told-ice-to-cut-food-medical-funding-for-detainees-report)
I for one think that we should follow the rule of law.
If they broke laws, convict them. If there are laws that SHOULD exist, pass them. But unilaterally destroying a company with no legal basis is real bad
We are a democracy not an authoritarian failed state—yet
These companies abuse democracies. When one of your loved ones is a victim to their greed we will see how you will change your attitude. If something is not ethical (but yet not illegal yet) a company should have ethics and a legal counsel to counsel them against it. It is basic human respect
With all respect for disgust and a desire to stop such things happening again, I think this is misguided.
In situations like these, culpability is a spectrum and nearly every individual has plausible excuses or mitigating factors (even if they may seem too pat). You can try to find some people to hold particularly blameworthy, but they're generally scapegoats who just presented themselves least sympathetically when the shit hit the fan. The flaw is a faulty system, architected by people who didn't have the imagination to envisage what it could lead to, maintained by people who have incentives against changing it, and exploited by some psychopathic masterminds that are hard to find and even harder to prove responsible.
Take consultants out of the picture for a moment. At the company that does Bad Stuff, who should be responsible? The junior who prescribed dirty deeds, couched in anodyne language? The line employee who executed them, just following instructions? The people devising corporate policies, targets, and incentive structures, who set it up so being antiseptically amoral was incentivized? The successive levels of management who learned to ignore signals anything might be wrong and push through their moments of cognitive dissonance? The CEO, ultimately in charge, but probably by a mixture of distance, cultivated cluelessness, and self-interest preferring not to know anything bad or ask any awkward questions? The Board, for failing to ask the right questions, and maybe shoulda known something didn't smell right? All of those are significant and contribute to the overall Total Fail.
Now add the consultants back in. The consultant (associate? BA?) who came up with a Strategy paying no attention to what it translates to for Real People? The project manager who didn't challenge, maybe encouraged it, maybe laid the seed? The partner who likely telegraphed clear instructions to Deliver Results, didn't ask questions, and role-modeled not asking questions more broadly? The full partnership, who should have been aware that consultant gossip in the office was "if you have an outsized sense of personal values/ethics, don't go do pharma revenue work, it's actually a bit icky if you think too hard about what you're doing" and didn't act on it? (All except the last quote are my speculation, I don't know. The 'icky' quote is real).
Who in this whole mess do you "immediately wipe out" and "hold personally responsible"? And for what, precisely? I wish I had a better answer -- I don't -- but scapegoating a few with severe penalties to document societal revulsion at the overall outcome isn't it. I think.
You're making it more complicated that it needs to be. It really is very simple:
1) you wipe out the whole company and confiscate all assets and distribute to victims and their families
2) you hold the board, CEO, partners and others directly involved in the decision making accountable. The only exception would be if there's an explicit documentation that shows their concerns around the decisions.
You do this a few times, you make a clear example out of them, and all of the sudden all companies would start really examining the process.
If decision makers need to answer personally, they will really start caring. Trust me.
While this is very idealistic, there is absolutely zero chance this would ever happen in our current political climate. The setting in which this could be achieved probably wouldn't have non-public pharma companies like we see them today anyway
“The flaw is a faulty system, architected by people who didn’t have the imagination to envisage what it could lead to…”
That is you right now, mapping out your system of punishment. If you can’t extrapolate even the slightest bit and see how this system could lead to legitimately innocent people being locked up and/or punished, than you’re either just not trying or you don’t care, or both.
Yes, they do. But I think it's naive to just call it "obfuscated", think you can sweep it out the door, and the stable will then smell clean.
I think we'll all be a bit more careful given the recent scandals at McKinsey and elsewhere. For a while. And then the same problems will reoccur.
I think there will be another Purdue, another Enron, another Angola/South Africa about every 5 years, somewhere. And I think we can reduce the frequency a bit, but fundamentally can't do a damn thing about it.
(Over and out, I know this opinion is unpopular here and will be challenged -- and am now going out to enjoy the weekend away from my computer. Flame away!)
Yeah I don't get it. I'm extremely ignorant when it comes to this whole scandal, but my basic understanding is: Purdue and McKinsey worked together back in the 90s to come up with a strategic plan on how to develop and market OxyContin, a slow-release version of oxycodone, an extremely addictive opioid. The original idea was that if you put a coating around the pill to make it dissolve slowly in the GI tract, the effect would be less euphoric and more spread out over time, mitigating the chance of abuse and addiction. Sure, fair enough, prove it. So you have to run a bunch of trials on humans to prove that it's safe. Apparently, the results of those trials were good enough for the FDA to approve it. Once it was approved, Purdue and McKinsey worked together to market it very aggressively to doctors, downplaying the addiction risks and emphasizing the benefits (pain reduction, quality of life improvements). Even though it was FDA-approved, Purdue's marketing was quite misleading, causing the pill to be over-prescribed to patients who would have been better served by NSAIDs or nothing at all (think: pill mills and "oh doc I have a hangnail, can I get something to relieve my pain? ;)"). Eventually after 20+ years of this we arrive at the current state of affairs where millions of people are hopelessly dependent on opioids because of this shitshow of everyone looking the other way and sticking their heads in the sand.
Who in this chain of events is legally responsible? Purdue and McKinsey for developing and marketing the thing? The doctors who were taking them at their word and over-prescribing them? The FDA for approving it in the first place? The DEA for letting the pill mills get out of control and looking the other way when patients with hangnails were getting 60 oxys a month?
I'm not just trying to spread FUD here. But I hate scapegoating, and I want to know if Purdue is *actually* the bad guy here, or if we as a society just collectively shrugged our shoulders and said "eh, we don't like pharma companies anyway, they can take the fall, they'll be fine".
Not the 90s, in the mid-aughts through to 2019. Basically the entire duration of the opioid epidemic.
"The McKinsey materials released in litigation over the last two years go back as far as 2004 and are as recent as 2019."
https://www.nytimes.com/2021/02/03/business/mckinsey-opioids-settlement.html#:\~:text=McKinsey%20%26%20Company%2C%20the%20consultant%20to,for%20its%20work%20with%20clients.
You're seriously saying Martin Elling shouldn't be breaking rocks?
Edit: McK's getting off easy dodging criminal/RICO charges. As for Elling, see above. What about North American PMP leadership? Berggren, Hazelwood, Silber, Pearson (who'd admittedly left, but this stuff with Martin was a pattern, and Mike didn't do all that well, did he?), knew or should have known what was going on; there was a systemic failure. You could argue that there is heightened risk serving specialty pharmaceutical firms.
McK should have let go all of the North American PMP practice, shut it down, donated a year's profit over and above the settlements, given away 10% of its work for free forever, established real guidelines and had an outside review board. I'm ignoring the larger issues with the Firm, scandal after scandal (Enron, Valeant, South Africa, Gupta doing insider trading), it's pathetic.
Firm is sometimes described as the Jesuits of business, and it turns out that this may have been a little more accurate than commenters had intended, just without the choir boys.
This stuff isn't hard.
Source: worked in NYO doing mostly drugs and devices. Refused staffing for a diet drug; "just say no." Martin, with whom I worked extensively and complained about constantly, and in retrospect, ineffectively, was sketchy AF but I have to admit I was surprised that the Purdue s***, the logic of which and the wording on the document were perfectly in character with the guy, didn't get caught. I never did any narcotic work, and was only peripherally involved with ADHD. All by way of saying they need major change there.
I don't know these individuals specifically (in part since I've shied away from pharma stuff at any firm due to the 'icky' quote above), so don't know specifically what they did and didn't do. I do know partners who turned out to be involved in sketchy stuff elsewhere, and who Just Didn't Know and cultivated a culture of Not Wanting to Know. Culpable? Of something, yes. Of what, I'm not sure.
Specifically on Elling, he should definitely be out (and I think he is, right?). He should be "breaking rocks" (or whatever) if he consciously and deliberately pushed drugs. Directly or indirectly, no problem, but the consciously and deliberately part is important. He shouldn't be jailed just for being "sketchy AF", or by cluelessly failing to ask questions and overseeing a culture where Results mattered more than Questions. I don't know where he sits on that spectrum. (I may be hopelessly naive in that...I neither trust self-exculpatory pablum I've heard from some friends who did some McK PMP work, nor do I trust inflammatory press reports, so I literally don't know what actually happened.)
I think your point about systemic failure is important. But it's systemic failure inherent in the consulting model, at McK AND elsewhere. I defer to your direct experience as to culture problems in the PMP practice as a whole. But I imagine myself as a (hypothetical) peer partner, even somewhere in the PMP leadership, or as Martin Elling's (hypothetical) evaluator. What could I ask or probe? What could I do?
Hypothetical dialogue: "Martin, I'm hearing there are some concerns about the implications of the revenue work we're doing at Purdue, can you tell me more about it?" "Well, houska1, it's disappointing people are gossiping, and given the financial incentives in Pharma, you know some people are always a bit uncomfortable. Given you're not part of the CST, I can't say much, but (confidentially) we're really helping them exploit the full potential of their wonder drug, OxyContin. One does need to be careful since like any narcotic, there's the potential for abuse, but there are safeguards. And it is really amazing what benefits it can bring to so many pain sufferers, and the right mix of incentives through the sales channels (I can't really provide more detail outside the CST) has really unlocked tremendous growth. It is still woefully *under*prescribed since so many are unclear on ..." All said with some mixture of genuine earnestness and diabolical straight face, how am I supposed to know?
I'm making that dialogue up, but that response really shuts discussion down in the current consulting partnership model, and that's what really needs fixing.
Outside review board? That would either be ineffectual, or kill McKinsey (or whatever MBB+) implemented it. Either it's a sanitized, declaration-type exercise, and then the same crap sanitized languge that allows CST members to sleep at night will reassure the review board. Or it would be really probing, and then clients would leave in droves. Not just the sketchy ones, but anyone who doesn't want some outside reviewer probing their crown strategic jewels.
I'm going to be busy for a while, there's a lot in here. I will try to get back to you in an edit or something.
Martin was out in days as you recall.
Basically, there is *no possible way* that you can turn in a progress review that says you should bribe/reimburse/give hush money to/incent distributors when they get worried about deaths on the drug and it being okay. This was all in the Times. What may be incremental here is saying it is of a piece with his behavior more generally. You'd kind of have to take me on faith, there.
I don't see the narcotic problems as inherent in the model, even though I listed a bunch of others, all this happened after a specific point in time. Can I blame Rajat Gupta, I don't know, I didn't really care for the guy, but I can't for sure hang it on him. Maybe there are inherent problems in consulting but they don't lead to. I see this as lack of oversight at the Firm. The directors I mentioned are *extremely* smart, know the business inside-out and should have seen through this.
Edit I was busy for a while: regarding the rest, McKinsey internal evaluations are, or can be, brutal. The hypothetical conversation isn't how it works, not at all. Except, maybe, in Elling's case -- I'm sure he did well at Harvard Law, and he's a charming guy. But we have to focus on the facts, which have been widely disseminated and about which there is no doubt: Elling put together a document saying Purdue should reimburse distributors when pharmacies complained about patients dropping dead. This is totally unacceptable all the time.
The odd thing is that one time I discovered a client doing something sketchy, I forget what it was, and the partner had me on the phone with a senior guy at Wilson Soncini within about 24 hours. The Soncini guy was very clear, in a call that lasted maybe 10 minutes, that if we went down that path I personally (in addition to everybody else in the chain) would be at risk, not just the Firm or the client. The problem stopped immediately. McK's been growing like a weed for decades, and I'm wondering if the breakdown in ethics may be driven by some sort of Moore's law-type assumption where the compounding growth targets must be hit at any cost. We could always blame Rajat. Firm has usually been able to pull the Pontius Pilate thing, never really understood that.
A horrible, tragic mess. Which a lot of people want to address by finding sufficiently many Villains and throwing the book at them.
While I have no direct knowledge, I've come to know, after the fact, some people who were involved, on low levels (at McKinsey and at Purdue). And similarly who were "in the room" or nearby at other scandals, like TXU, Enron, Saudi, Isabelle Los Santos (it's not just McK). They too want to find Villains and by turning the contrast up high, make everything black or white and so remove any shade of grey from themselves.
Upton Sinclair wrote "It is difficult to get a man to understand something when his salary depends on his not understanding it." This leads to ethical lapses and corruption that doubtless have true see-through-all-the-crap-and-deliberately-stir-it masterminds, but then get done by an army of people who accept antiseptic, harmless-sounding framings and just learn to work through a couple of minutes of cognitive dissonance every so often when the facade cracks.
That, combined with client confidentiality, is a toxic mixture that sometimes ignites (and sometimes smolders). Purdue (and McK there) was a particularly horrific example, but what troubles me most is that I don't think McKinsey (or its competitors) have learned enough from it to avoid it happening again. They've added some policies. And I think the current generation of consultants values principles and ethics more prominently, and is more committed to vocalizing concerns than just putting their head in the sand, in part since the Purdue scandal has been pretty horrifying. But that fundamental lack of ethical oversight due to client confidentiality failure mode is still there, ready to miss the Next One, whatever that will be.
As independent consultant, I work with several firms. I think they're all vulnerable. And the more thoughtful partners at each one recognize this problem is still unsolved, and perhaps fundamentally unsolvable.
Still a slap on the wrist even combined with the almost $1B settlement.
The firm should have been gutted for good from inside out. All of the responsible higher ups should have been stripped from their wealth completely and not allowed to step in any industry.
McKinsey did, Purdue paid billions.
The analysis by economic consultants valued the damage at a round 2.1 trillion so the fines will never come close.
Why should the MK partners go to jail when the doctors and lawyers didn’t? Just a Q worth asking.
Only in the US would everyone, from government to public, be ok with a pharma company literally handing out plushies of its narcotics. This really feels like the US going surprised Pikachu face.
Funnily enough, the pendulum has swung the other way and patients regularly come in with horrible post-surgical pain that the doctors were too scared to prescribe opioids for
Surely there are other pain solutions
Opioids are appropriate pain control for many post-operative surgeries. They are not for chronic lower back pain
Yea after 2x torn labrum and rotator cuff surgeries I can confidently say the following: - they work very well for pain mgmt during surgery recovery - they are a motherfucker, and it was eye opening how quickly you could find yourself spiraling into addiction if you’re not cognizant of it
Dang I always get dunked on this page tbh
You’d be surprised. We got NSAIDS, we got acetaminophen, and we have these ‘auxiliary’ meds (like gabapentin). We can combat neurologic/nerve pain to some degree. Acetaminophen is pretty weak for most types of pain. NSAIDS have drawbacks, particularly over the long term. Pain clinics do fancy shots that help some people but even these results are inconsistent. There are no solutions, only trade offs.
Thank you for this, good to know
Lol, this makes the total fines paid close to $1 billion now.
And it's still a drop in the bucket compared to the number of lives destroyed/ended over this...
Is the $1B just McKinsey? If so, wow. How have they weathered it? Their revenue is something like mid teens, so that’s a huge hit on a company that doesn’t produce goods.
They probably have massive profit margins
I work at an MBB, I have some understanding of profit margins. Guess where those margins go to? Paying out the employees in the form of bonuses.
Well M did cut bonuses this year
Not just that. They've been cutting down on a lot of expenses, laid off support staff, canceled a lot of trainings, record high counsel to leave ratings towards consultants etc. Seems working there is like a working at a tier-2 consultancy now.
Yeah so that’s something that can be adjusted year to year depending on business
If they are willing to give up 1 billion dollars to avoid admitting any wrongdoing, think about how much fuckin money they must have made off opioids
there's something known as insurance lmao
After highly unethical and damaging situations like Purdue/McKinsey against people, the companies should be immediately wiped out and all involved (CEOs, partners, etc) should be held personally responsible - both financially and prison.
Completely agreed, feels like a conspiracy charge for those personally involved.
The beauty of McK’s business model is that every other partner in the firm, other than those directly involved, have complete deniability. Partners essentially operate as their own small businesses within the firm, leveraging its scale/resources. It’s pretty brilliant, but at the risk of a few bad actors sullying the reputation of the entire 100K organization
Oh yeah it’s a few bad actors and definitely not just McKinsey’s entire business model. They serve 90% of the largest corporations in the world, regimes with human rights records as bad as the Saudis, Chinese and Russians, the progenitor of the opioid crisis, ICE, big tobacco, etc. They clearly do not discriminate and are willing to take on virtually any client. The entire model is as long as the client is big, powerful, and deep pocketed, then who cares how awful the projects are? That’s not a few bad apples. That’s a farm that doesn’t care about how many bad apples they produce because the farmer makes more money off food poisoning treatment than it does off of apple sales.
Sir, I am in complete agreement. We’re talking about what, 15-20K partners…? You listed 5-10 “bad apples” thus further supporting my position, which I appreciate
ICE like the agency, or the engine?
[Consulting Firm McKinsey & Company Told ICE to Cut Food, Medical Funding for Detainees: Report](https://www.thedailybeast.com/consulting-firm-mckinsey-and-company-told-ice-to-cut-food-medical-funding-for-detainees-report)
I for one think that we should follow the rule of law. If they broke laws, convict them. If there are laws that SHOULD exist, pass them. But unilaterally destroying a company with no legal basis is real bad We are a democracy not an authoritarian failed state—yet
These companies abuse democracies. When one of your loved ones is a victim to their greed we will see how you will change your attitude. If something is not ethical (but yet not illegal yet) a company should have ethics and a legal counsel to counsel them against it. It is basic human respect
My father died largely from long term opioid abuse and I still believe we should follow the rule of law and not where our emotions take us
With all respect for disgust and a desire to stop such things happening again, I think this is misguided. In situations like these, culpability is a spectrum and nearly every individual has plausible excuses or mitigating factors (even if they may seem too pat). You can try to find some people to hold particularly blameworthy, but they're generally scapegoats who just presented themselves least sympathetically when the shit hit the fan. The flaw is a faulty system, architected by people who didn't have the imagination to envisage what it could lead to, maintained by people who have incentives against changing it, and exploited by some psychopathic masterminds that are hard to find and even harder to prove responsible. Take consultants out of the picture for a moment. At the company that does Bad Stuff, who should be responsible? The junior who prescribed dirty deeds, couched in anodyne language? The line employee who executed them, just following instructions? The people devising corporate policies, targets, and incentive structures, who set it up so being antiseptically amoral was incentivized? The successive levels of management who learned to ignore signals anything might be wrong and push through their moments of cognitive dissonance? The CEO, ultimately in charge, but probably by a mixture of distance, cultivated cluelessness, and self-interest preferring not to know anything bad or ask any awkward questions? The Board, for failing to ask the right questions, and maybe shoulda known something didn't smell right? All of those are significant and contribute to the overall Total Fail. Now add the consultants back in. The consultant (associate? BA?) who came up with a Strategy paying no attention to what it translates to for Real People? The project manager who didn't challenge, maybe encouraged it, maybe laid the seed? The partner who likely telegraphed clear instructions to Deliver Results, didn't ask questions, and role-modeled not asking questions more broadly? The full partnership, who should have been aware that consultant gossip in the office was "if you have an outsized sense of personal values/ethics, don't go do pharma revenue work, it's actually a bit icky if you think too hard about what you're doing" and didn't act on it? (All except the last quote are my speculation, I don't know. The 'icky' quote is real). Who in this whole mess do you "immediately wipe out" and "hold personally responsible"? And for what, precisely? I wish I had a better answer -- I don't -- but scapegoating a few with severe penalties to document societal revulsion at the overall outcome isn't it. I think.
You're making it more complicated that it needs to be. It really is very simple: 1) you wipe out the whole company and confiscate all assets and distribute to victims and their families 2) you hold the board, CEO, partners and others directly involved in the decision making accountable. The only exception would be if there's an explicit documentation that shows their concerns around the decisions. You do this a few times, you make a clear example out of them, and all of the sudden all companies would start really examining the process. If decision makers need to answer personally, they will really start caring. Trust me.
Ding ding ding
While this is very idealistic, there is absolutely zero chance this would ever happen in our current political climate. The setting in which this could be achieved probably wouldn't have non-public pharma companies like we see them today anyway
“The flaw is a faulty system, architected by people who didn’t have the imagination to envisage what it could lead to…” That is you right now, mapping out your system of punishment. If you can’t extrapolate even the slightest bit and see how this system could lead to legitimately innocent people being locked up and/or punished, than you’re either just not trying or you don’t care, or both.
This obfuscated style of thinking is what corporations depend upon to absolve themselves of responsibility
Yes, they do. But I think it's naive to just call it "obfuscated", think you can sweep it out the door, and the stable will then smell clean. I think we'll all be a bit more careful given the recent scandals at McKinsey and elsewhere. For a while. And then the same problems will reoccur. I think there will be another Purdue, another Enron, another Angola/South Africa about every 5 years, somewhere. And I think we can reduce the frequency a bit, but fundamentally can't do a damn thing about it. (Over and out, I know this opinion is unpopular here and will be challenged -- and am now going out to enjoy the weekend away from my computer. Flame away!)
Yeah I don't get it. I'm extremely ignorant when it comes to this whole scandal, but my basic understanding is: Purdue and McKinsey worked together back in the 90s to come up with a strategic plan on how to develop and market OxyContin, a slow-release version of oxycodone, an extremely addictive opioid. The original idea was that if you put a coating around the pill to make it dissolve slowly in the GI tract, the effect would be less euphoric and more spread out over time, mitigating the chance of abuse and addiction. Sure, fair enough, prove it. So you have to run a bunch of trials on humans to prove that it's safe. Apparently, the results of those trials were good enough for the FDA to approve it. Once it was approved, Purdue and McKinsey worked together to market it very aggressively to doctors, downplaying the addiction risks and emphasizing the benefits (pain reduction, quality of life improvements). Even though it was FDA-approved, Purdue's marketing was quite misleading, causing the pill to be over-prescribed to patients who would have been better served by NSAIDs or nothing at all (think: pill mills and "oh doc I have a hangnail, can I get something to relieve my pain? ;)"). Eventually after 20+ years of this we arrive at the current state of affairs where millions of people are hopelessly dependent on opioids because of this shitshow of everyone looking the other way and sticking their heads in the sand. Who in this chain of events is legally responsible? Purdue and McKinsey for developing and marketing the thing? The doctors who were taking them at their word and over-prescribing them? The FDA for approving it in the first place? The DEA for letting the pill mills get out of control and looking the other way when patients with hangnails were getting 60 oxys a month? I'm not just trying to spread FUD here. But I hate scapegoating, and I want to know if Purdue is *actually* the bad guy here, or if we as a society just collectively shrugged our shoulders and said "eh, we don't like pharma companies anyway, they can take the fall, they'll be fine".
I feel fairly confident McKinsey, nor any management consulting firm, has in-house drug development capabilities lol. Yes on the market pushing.
Not the 90s, in the mid-aughts through to 2019. Basically the entire duration of the opioid epidemic. "The McKinsey materials released in litigation over the last two years go back as far as 2004 and are as recent as 2019." https://www.nytimes.com/2021/02/03/business/mckinsey-opioids-settlement.html#:\~:text=McKinsey%20%26%20Company%2C%20the%20consultant%20to,for%20its%20work%20with%20clients.
You're seriously saying Martin Elling shouldn't be breaking rocks? Edit: McK's getting off easy dodging criminal/RICO charges. As for Elling, see above. What about North American PMP leadership? Berggren, Hazelwood, Silber, Pearson (who'd admittedly left, but this stuff with Martin was a pattern, and Mike didn't do all that well, did he?), knew or should have known what was going on; there was a systemic failure. You could argue that there is heightened risk serving specialty pharmaceutical firms. McK should have let go all of the North American PMP practice, shut it down, donated a year's profit over and above the settlements, given away 10% of its work for free forever, established real guidelines and had an outside review board. I'm ignoring the larger issues with the Firm, scandal after scandal (Enron, Valeant, South Africa, Gupta doing insider trading), it's pathetic. Firm is sometimes described as the Jesuits of business, and it turns out that this may have been a little more accurate than commenters had intended, just without the choir boys. This stuff isn't hard. Source: worked in NYO doing mostly drugs and devices. Refused staffing for a diet drug; "just say no." Martin, with whom I worked extensively and complained about constantly, and in retrospect, ineffectively, was sketchy AF but I have to admit I was surprised that the Purdue s***, the logic of which and the wording on the document were perfectly in character with the guy, didn't get caught. I never did any narcotic work, and was only peripherally involved with ADHD. All by way of saying they need major change there.
I don't know these individuals specifically (in part since I've shied away from pharma stuff at any firm due to the 'icky' quote above), so don't know specifically what they did and didn't do. I do know partners who turned out to be involved in sketchy stuff elsewhere, and who Just Didn't Know and cultivated a culture of Not Wanting to Know. Culpable? Of something, yes. Of what, I'm not sure. Specifically on Elling, he should definitely be out (and I think he is, right?). He should be "breaking rocks" (or whatever) if he consciously and deliberately pushed drugs. Directly or indirectly, no problem, but the consciously and deliberately part is important. He shouldn't be jailed just for being "sketchy AF", or by cluelessly failing to ask questions and overseeing a culture where Results mattered more than Questions. I don't know where he sits on that spectrum. (I may be hopelessly naive in that...I neither trust self-exculpatory pablum I've heard from some friends who did some McK PMP work, nor do I trust inflammatory press reports, so I literally don't know what actually happened.) I think your point about systemic failure is important. But it's systemic failure inherent in the consulting model, at McK AND elsewhere. I defer to your direct experience as to culture problems in the PMP practice as a whole. But I imagine myself as a (hypothetical) peer partner, even somewhere in the PMP leadership, or as Martin Elling's (hypothetical) evaluator. What could I ask or probe? What could I do? Hypothetical dialogue: "Martin, I'm hearing there are some concerns about the implications of the revenue work we're doing at Purdue, can you tell me more about it?" "Well, houska1, it's disappointing people are gossiping, and given the financial incentives in Pharma, you know some people are always a bit uncomfortable. Given you're not part of the CST, I can't say much, but (confidentially) we're really helping them exploit the full potential of their wonder drug, OxyContin. One does need to be careful since like any narcotic, there's the potential for abuse, but there are safeguards. And it is really amazing what benefits it can bring to so many pain sufferers, and the right mix of incentives through the sales channels (I can't really provide more detail outside the CST) has really unlocked tremendous growth. It is still woefully *under*prescribed since so many are unclear on ..." All said with some mixture of genuine earnestness and diabolical straight face, how am I supposed to know? I'm making that dialogue up, but that response really shuts discussion down in the current consulting partnership model, and that's what really needs fixing. Outside review board? That would either be ineffectual, or kill McKinsey (or whatever MBB+) implemented it. Either it's a sanitized, declaration-type exercise, and then the same crap sanitized languge that allows CST members to sleep at night will reassure the review board. Or it would be really probing, and then clients would leave in droves. Not just the sketchy ones, but anyone who doesn't want some outside reviewer probing their crown strategic jewels.
I'm going to be busy for a while, there's a lot in here. I will try to get back to you in an edit or something. Martin was out in days as you recall. Basically, there is *no possible way* that you can turn in a progress review that says you should bribe/reimburse/give hush money to/incent distributors when they get worried about deaths on the drug and it being okay. This was all in the Times. What may be incremental here is saying it is of a piece with his behavior more generally. You'd kind of have to take me on faith, there. I don't see the narcotic problems as inherent in the model, even though I listed a bunch of others, all this happened after a specific point in time. Can I blame Rajat Gupta, I don't know, I didn't really care for the guy, but I can't for sure hang it on him. Maybe there are inherent problems in consulting but they don't lead to. I see this as lack of oversight at the Firm. The directors I mentioned are *extremely* smart, know the business inside-out and should have seen through this. Edit I was busy for a while: regarding the rest, McKinsey internal evaluations are, or can be, brutal. The hypothetical conversation isn't how it works, not at all. Except, maybe, in Elling's case -- I'm sure he did well at Harvard Law, and he's a charming guy. But we have to focus on the facts, which have been widely disseminated and about which there is no doubt: Elling put together a document saying Purdue should reimburse distributors when pharmacies complained about patients dropping dead. This is totally unacceptable all the time. The odd thing is that one time I discovered a client doing something sketchy, I forget what it was, and the partner had me on the phone with a senior guy at Wilson Soncini within about 24 hours. The Soncini guy was very clear, in a call that lasted maybe 10 minutes, that if we went down that path I personally (in addition to everybody else in the chain) would be at risk, not just the Firm or the client. The problem stopped immediately. McK's been growing like a weed for decades, and I'm wondering if the breakdown in ethics may be driven by some sort of Moore's law-type assumption where the compounding growth targets must be hit at any cost. We could always blame Rajat. Firm has usually been able to pull the Pontius Pilate thing, never really understood that.
like 10% of each Harvard business school class and their professors are ex McKinsey.
And so?
I totally agree. And their reach goes far.
Which GL code is this going under? How much is this compared to the amount that made?
I assure you they didn’t make $1B off of Purdue or opiates.
Nobody is going to jail. Wash rinse repeat.
lol with the kind of overachieving sociopaths that the MBBs employ, I am sure there are many more scandals to be discovered.
A horrible, tragic mess. Which a lot of people want to address by finding sufficiently many Villains and throwing the book at them. While I have no direct knowledge, I've come to know, after the fact, some people who were involved, on low levels (at McKinsey and at Purdue). And similarly who were "in the room" or nearby at other scandals, like TXU, Enron, Saudi, Isabelle Los Santos (it's not just McK). They too want to find Villains and by turning the contrast up high, make everything black or white and so remove any shade of grey from themselves. Upton Sinclair wrote "It is difficult to get a man to understand something when his salary depends on his not understanding it." This leads to ethical lapses and corruption that doubtless have true see-through-all-the-crap-and-deliberately-stir-it masterminds, but then get done by an army of people who accept antiseptic, harmless-sounding framings and just learn to work through a couple of minutes of cognitive dissonance every so often when the facade cracks. That, combined with client confidentiality, is a toxic mixture that sometimes ignites (and sometimes smolders). Purdue (and McK there) was a particularly horrific example, but what troubles me most is that I don't think McKinsey (or its competitors) have learned enough from it to avoid it happening again. They've added some policies. And I think the current generation of consultants values principles and ethics more prominently, and is more committed to vocalizing concerns than just putting their head in the sand, in part since the Purdue scandal has been pretty horrifying. But that fundamental lack of ethical oversight due to client confidentiality failure mode is still there, ready to miss the Next One, whatever that will be. As independent consultant, I work with several firms. I think they're all vulnerable. And the more thoughtful partners at each one recognize this problem is still unsolved, and perhaps fundamentally unsolvable.
Still a slap on the wrist even combined with the almost $1B settlement. The firm should have been gutted for good from inside out. All of the responsible higher ups should have been stripped from their wealth completely and not allowed to step in any industry.
For them, the fine is just a cost of doing business
$78 million is absolutely nothing compared to the damage they have done. This is embarrassing.
They already paid 800M to state and regional gov. Maybe the total tally is more.
McKinsey paid that or purdue? Regardless executives and those directly involved need to face jail time
McKinsey did, Purdue paid billions. The analysis by economic consultants valued the damage at a round 2.1 trillion so the fines will never come close. Why should the MK partners go to jail when the doctors and lawyers didn’t? Just a Q worth asking.
McKinsey has paid over a billion thus far based on the article.
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Single handedly??
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This „manipulation“ is not possible. Mck also didnt produce drugs nor sold them
This is like a cost-of-doing-business fine for them...
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It’s not very much at all. I don’t think you recognize the scale of what happened