Arnab Ghatak of McKinsey named in U.S. opioid case
McKinsey & Company advised owners of Purdue Pharma to “turbo-charge” sales of its opioid pain killers in order to boost profits, according to documents reportedly released last week in a bankruptcy court in New York.
The opioids are normally prescribed by doctors to patients with severe pain, resulting from major medical procedures, cancer or acute physical injuries. But many patients, who take the drug, can get addicted to it. Also, federal and state investigators found some drug companies had aggressively promoted sales of their highly addictive opioid drugs, in order to boost profits.
“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy U.S. Attorney General Jeffrey A. Rosen. In the U.S., from 1999-2018, nearly 450,000 people died from overdoses involving opioids, including prescription and illicit opioids. Compared to the general population, a patient who receives three months of prescribed opioids is 30 times more likely to overdose and die.
In 2017, McKinsey consultants advised the Sacklers, who then owned Purdue, that opioid sales can be boosted by giving distributors a rebate for every overdose attributable to pills they sold, according to a report in The New York Times. This advice was given at a time when thousands were dying each year, from opioid overdoses.
McKinsey projected, for instance, that in 2019 nearly 2,500 customers of the pharmacy CVS would either have an overdose or develop an opioid use disorder. A rebate of $14,810 per “event” meant that Purdue would pay CVS $36.8 million that year, according to a chart tweeted by Michael Forsythe of the New York Times. Forsythe and Walt Bodganich, an investigative reporter and winner of three Pulitzer prizes for investigative reporting, wrote the story about McKinsey’s advice to Purdue.
A privately owned consulting firm with 35,000 employees in more than 65 countries, McKinsey’s main office is in New York. Purdue, which is based in Stamford, Connecticut, manufactures, markets and sells prescription opioids, including OxyContin, Butrans, and Hysingla.
In 2013, Arnab (Arnie) Ghatak, a consultant at McKinsey, emailed his colleagues that, a meeting in which he and other McKinsey colleagues persuaded the Sacklers to aggressively market OxyContin, “went very well,” the New York Times reported.
In June 2018, the Massachusetts Attorney General sued Purdue “for misleading prescribers and consumers about the addiction and health risks of their opioids, including OxyContin, to get more people to take these drugs, at higher and more dangerous doses, and for longer periods of time to increase the companies’ profits.”
“Since 2008,” the complaint states, “Purdue has sent sales representatives to push its opioids in Massachusetts doctors’ offices, clinics, and hospitals more than 150,000 times and has given money, meals, or gifts to more than 2,000 Massachusetts prescribers. Purdue also rewarded prescribers with consulting deals worth tens of thousands of dollars and kept promoting drugs to them even when the doctors wrote illegal prescriptions, lost their medical licenses, and their patients died.” Since 2008, Purdue has sold more than 70 million doses of opioids in the state of Massachusetts, generating revenue of more than $500 million.
The lawsuit says McKinsey advised the Sacklers on instructing their sales force “to maximize profits by ‘emphasizing [the] broad range of doses’ — which was code for pushing the doses that were highest and most profitable.” Also, McKinsey helped Purdue to plan on how to “counter the emotional messages from mothers with teenagers that overdosed” on OxyContin.
After the Massachusetts lawsuit, Martin Elling, a senior McKinsey partner, emailed his colleague Ghatak:“It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything” other than “eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.” Ghatak, replied: “Thanks for the heads up. Will do.”
“(McKinsey) knew what was going on. And they found a way to look past it, through it, around it, so as to answer the only questions they cared about: how to make the client money and, when the walls closed in, how to protect themselves,” tweeted Anand Giridharadas, an author and former McKinsey consultant. “This is the banality of evil, MBA edition.”
Ghatak, on his earlier LinkedIn profile, stated he was a senior partner and a leader of the Global Public Health practice at McKinsey. The link has apparently been deleted. He was on the boards of the Global Fund for Children and Pangaea Global, an AIDS philanthropy. Currently there is no mention of him on either of these sites.
Ghatak earned his degree from Princeton University and a joint MD, MBA from the University of Pennsylvania. He is the son of Mitali Ghatak and Subhatosh Ghatak. His father was a mechanical engineer for the city of Columbus, Ohio, and his mother worked at a Medicaid office.
in 2019, Purdue filed for bankruptcy, following more than 2,600 opioid-related lawsuits. Earlier this week, on November 24, Purdue pleaded guilty to charges filed against it by the U.S. Justice Department. Its admissions included marketing “its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids” to abusers and paying “kickbacks to providers to encourage them to prescribe even more of its products.”
As part of the settlement, Purdue will pay more than $8 billion in fines and penalties. Also, the company agreed that it’s assets will be restructured to benefit the public. The U.S. Justice Department also settled with the Sackler family, with their agreeing to pay $225 million in damages to resolve a civil case. Purdue continues to face other lawsuits, including from 49 states which are seeking $2.15 trillion in claims. The company, which is currently protected from the cases by its bankruptcy filing, says it has $10 to $12 billion in net assets. Half the states opposed the Justice Department settlement with Purdue and the Sacklers.
No criminal or civil complaints have been filed against McKinsey by the federal government. McKinsey is reportedly cooperating fully with the opioid-related investigations. In 2019, it stopped advising clients on opioid-specific business.
In January, John Kapoor, 76, founder of Insys Therapeutics, was sentenced to 66 months in prison for “orchestrating a scheme to bribe practitioners to prescribe” an opioid-based pain medication, often when medically unnecessary.
Cynthia Munger’s son is recovering from opioid addiction after being prescribed Purdue’s OxyContin more than a decade ago as a high school baseball player with a shoulder injury. Pushing for Purdue owners and company officials to be charged with crimes, she told AP, “Until we do that and we stop accusing brick and mortar and not individuals, nothing will change…”
