Consulting firm McKinsey and Co. has agreed to pay $78 million to settle claims from insurers and health care funds that its work with drug companies helped fuel an opioid addiction crisis. The agreement was revealed late Friday in documents filed in federal court in San Francisco. Under the agreement, McKinsey would establish a fund to reimburse insurers, private benefit plans, and others for some or all of their prescription opioid costs.

The insurers argued that McKinsey worked with Purdue Pharma, the maker of OxyContin, to create and employ aggressive marketing and sales tactics to overcome doctors' reservations about the highly addictive drugs. As a result, insurers were forced to pay for prescription opioids rather than safer, non-addictive, and lower-cost drugs, including over-the-counter pain medication. They also had to cover the costs of opioid addiction treatment.

According to the U.S. Centers for Disease Control and Prevention, nearly 280,000 people in the U.S. died from overdoses of prescription opioids from 1999 to 2021. Insurers argued that McKinsey continued to work with Purdue Pharma even after the extent of the opioid crisis was apparent.

This settlement is the latest in a years-long effort to hold McKinsey accountable for its role in the opioid epidemic. In February 2021, the company agreed to pay nearly $600 million to U.S. states, the District of Columbia, and five U.S. territories. In September, McKinsey announced a separate $230 million settlement agreement with school districts and local governments.

When asked for comment, McKinsey referred to a statement it released in September, stating that it believed its past work was lawful and denied allegations to the contrary. The company said it reached a settlement to avoid protracted litigation. McKinsey also mentioned that it stopped advising clients on any opioid-related business in 2019.

Similar settlements have resulted in nearly $50 billion being paid out to state and local governments. Companies such as CVS and RiteAid have been sued for their role in fueling the overdose epidemic. However, a KFF Health News investigation found that much of the money from these settlements has remained untouched.

The latest settlement with McKinsey resolves claims by third-party payers, including insurers that provide health and welfare benefits. Paul Geller, a lawyer for the plaintiffs, stated that the drug crisis was caused by an oversupply of dangerous addictive drugs and that the case aimed to recover some of the money spent on the over-prescribed pills.

McKinsey did not admit wrongdoing in the settlement. The firm reiterated that it believed its past work was lawful and highlighted its commitment to no longer advise clients on any opioid-related business since 2019.

The opioid crisis has led to thousands of lawsuits filed by states, local governments, and Native American tribes against drug companies, distributors, and pharmacies. They have accused the drug companies of downplaying the risks of opioid painkillers, while distributors and pharmacies have been accused of ignoring red flags indicating illegal trafficking.

These lawsuits have resulted in over $50 billion in settlements with drugmakers, distributors, and pharmacy chains. The Supreme Court recently heard a challenge by President Joe Biden's administration to Purdue Pharma's multi-billion-dollar bankruptcy settlement, which resolves related claims against the drugmaker.

The settlement with McKinsey presents an opportunity for the U.S. to fund treatment solutions for substance use disorders. However, the KFF Health News investigation suggests that much of the money from these settlements has not been utilized for this purpose.