By Nate Raymond (NS:RYMD) and Mike Spector
BOSTON (Reuters) – McKinsey & Co is in the final stages of negotiating a deferred prosecution agreement to resolve a U.S. criminal investigation into the consulting firm’s work helping opioid manufacturers boost sales that allegedly contributed to a deadly addiction epidemic, people familiar with the matter said.
McKinsey is in talks to pay more than $600 million to resolve the longstanding U.S. Department of Justice probe, which also encompasses findings of civil violations, the people said.
The settlement, expected to be unveiled before the end of the year, would result in prosecutors seeking to dismiss criminal charges against McKinsey after a period of time as long as the company abides by the agreement’s terms.
The discussions are ongoing and the timetable for disclosing the settlement and the terms of the agreement could change, the sources said.
McKinsey and the Justice Department declined to comment.
As part of their investigation, prosecutors have also been looking at whether McKinsey obstructed justice in connection with its work advising opioid manufacturers, people familiar with the matter said. McKinsey said in 2021 it had fired two partners who had communicated about deleting documents.
McKinsey previously reached agreements totaling nearly $1 billion to settle widespread lawsuits and other legal actions alleging the company helped fuel the opioid epidemic through its work advising OxyContin maker Purdue Pharma and other drugmakers.
The settlements involved all 50 states, Washington, D.C., U.S. territories, various local governments, school districts, Native American tribes, and health insurers.
In 2019, McKinsey announced it would no longer advise clients on opioid-related businesses. The company has maintained that none of its settlements contain admissions of liability or wrongdoing.
Purdue pleaded guilty in 2020 to criminal charges covering widespread misconduct regarding its handling of prescription painkillers, including conspiring to defraud U.S. officials and pay illegal kickbacks to both doctors and an electronic healthcare records vendor.
Purdue is currently involved in court-ordered mediation over a multibillion-dollar settlement reached in bankruptcy proceedings that the U.S. Supreme Court turned aside.
Prosecutors in Boston and Roanoke, Virginia, are involved in the McKinsey investigation alongside officials at Justice Department headquarters in Washington.