The U.S. opioid epidemic holds important lessons for compliance professionals. This public health crisis is characterized by the widespread misuse of opioid drugs, leading to addiction, overdose deaths and a profound social and economic toll.
This epidemic has evolved over the past few decades, and while there are many contributing factors, the role of pharmaceutical companies, particularly in the early stages, is widely seen as a critical element.
The crisis began in the late 1990s, when prescription opioids such as oxycodone (OxyContin), hydrocodone, and morphine were increasingly prescribed to treat pain, which was often overestimated as being safely manageable. Opioids, while effective at managing pain, are highly addictive.
Ethics and Epidemics Lead to Conflicts of Interest
Pharmaceutical companies have played a significant role in the opioid epidemic, both in the development and marketing of opioids and in their sometimes-misleading promotion. In the 1990s, Purdue Pharma, the maker of OxyContin, introduced a new form of oxycodone with claims that it was less addictive than other opioids.
Purdue and other pharmaceutical companies pushed doctors to prescribe opioids more freely for a wide range of pain, even for conditions that were not necessarily severe. They used misleading advertising and aggressive sales tactics to promote these drugs, minimizing risks and overemphasizing benefits. Pharmaceutical companies provided financial incentives to doctors through gifts, speaking fees and other perks, encouraging them to prescribe opioids.
This created a conflict of interest, as doctors were incentivized to prescribe these medications despite the risks of addiction. The overprescription of opioids led to millions of people becoming addicted to prescription painkillers, which contributed to the subsequent heroin and fentanyl crises.
HHS OIG Investigations and Audits Drive Accountability
The Department of Health and Human Services Office of Inspector General (HHS OIG) plays a critical role in investigating and enforcing actions related to the abuse and diversion of prescription opioids. The HHS OIG is tasked with overseeing and ensuring the integrity of various health-related programs, including Medicare and Medicaid, and ensuring that organizations, such as pharmaceutical companies, comply with federal regulations. In the context of the opioid epidemic, the HHS OIG’s responsibilities are multi-faceted, including fraud and abuse enforcement, corporate accountability, audits of pharmaceutical practices, and civil and criminal penalties.
By holding pharmaceutical companies, healthcare providers, and individuals accountable for their roles in opioid abuse and diversion, the HHS OIG contributes to efforts to curb the crisis and prevent further harm. Their work, often in collaboration with other agencies, ensures that federal programs and public health initiatives are not inadvertently supporting the misuse of opioids, and they play a key role in enforcing regulations aimed at protecting public health.
The Purdue Pharma and McKinsey Case
The Purdue Pharma and McKinsey & Company settlement case was a significant development in the opioid epidemic, highlighting the roles that both the pharmaceutical company and its consulting firm played in fueling opioid misuse. Purdue Pharma, the maker of OxyContin, faced numerous lawsuits for its deceptive marketing practices, including downplaying the addictive nature of its product and aggressively promoting its use to doctors.
According to court documents, in May 2013, Purdue Pharma engaged McKinsey & Company, a global consulting firm, to recover lost OxyContin sales. Purdue retained McKinsey to conduct a rapid assessment of the underlying drivers of OxyContin performance, identify key opportunities to increase near-term OxyContin revenue, and develop plans to capture priority opportunities.
This 2013 effort was called Evolve to Excellence, or “E2E,” and included McKinsey advising Purdue on how to “turbocharge” the sales pipeline for OxyContin by, among other strategies, intensifying marketing to High Value Prescribers.
Charges and Legal Action Lead to Historic Settlement
In 2020, Purdue Pharma reached a historic $8 billion settlement with the U.S. Department of Justice, admitting to criminal charges of conspiring to mislead the public and healthcare providers about the risks of OxyContin. As part of the settlement, Purdue also filed for bankruptcy and agreed to restructure itself into a public-benefit corporation, with proceeds from its future profits going toward opioid addiction treatment and prevention efforts.
McKinsey & Company faced legal action for its role in advising Purdue Pharma on sales strategies that prioritized increased opioid prescriptions. Martin Elling, a former senior partner at McKinsey & Company, waived his right to indictment and pleaded guilty to one count of knowingly destroying records with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of the Department of Justice (DOJ).
As announced in January, McKinsey & Company agreed to pay $650 million to resolve criminal and civil investigations into the firm’s consulting work with opioids manufacturers, including Purdue Pharma, LP. The VA OIG, Food and Drug Administration Office of Criminal Investigations, FBI, HHS OIG, and Office of Personnel Management OIG investigated this case, with assistance from the Department of Justice Computer Crimes and Intellectual Property Section.
McKinsey & Company’s lack of integrity in its role as a healthcare consultant during the opioid crisis has had profound social, ethical, and public health consequences. The company’s actions serve as a cautionary tale about the dangers of placing profit motives over moral responsibility and the long-lasting impact such decisions can have on society.
Implications and Impact for Healthcare Compliance Leaders
This case has significant implications for healthcare compliance officers as well as consulting advisors. These professionals are responsible for ensuring that healthcare organizations and their business partners operate within the bounds of legal and ethical standards, protecting public health and avoiding harmful practices. The lessons learned from the Purdue and McKinsey cases underscore the critical importance of integrity, oversight, and accountability in both healthcare organizations and the consulting industry.
Lessons learned:
- Healthcare organizations need to strengthen oversight and monitoring of third-party relationships, ensuring that consultants and contractors act in compliance with the law and adhere to ethical guidelines.
- Healthcare compliance officers must create and enforce policies that prioritize patient health over profits.
- Consultants must be prepared to provide ethical guidance, even when it may not align with clients’ short-term financial interests.
- Consultants must understand the risks and reputational damage that can arise from unethical advice.
The Purdue Pharma and McKinsey investigation serves as a pivotal case for healthcare compliance officers and consultants, emphasizing the need for ethical guidance, transparency and accountability in all aspects of healthcare operations. Both groups must be vigilant about the potential risks of unethical advice and practices, and they must work to protect patients, safeguard public trust, and prevent further harm. These cases underscore that healthcare professionals, including consultants, have a duty to prioritize the well-being of patients and act in compliance with both legal and ethical standards.
Susan is a healthcare compliance leader with over four decades working in a variety of administrative and managerial capacities, including strategic planning, regulatory oversight, revenue cycle risk mitigation, denial and appeal management, privacy and information security, healthcare advocacy, clinical department leadership, provider practice administration, risk management, and quality outcomes. Currently, Susan provides compliance and privacy consulting services to a variety of healthcare organizations, including program implementation, policy and procedure development, compliance and privacy training, and regulatory oversight administration.
Susan is a Certified Internal Auditor (CIA), Certified Healthcare Compliance (CHC), Certified Professional Coder (CPC) and holds a Certification in Risk Management (CRMA).
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