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Local Unions sue consulting giant for opioid crisis money

The lawsuit against McKinsey & Co. was filed on behalf of the health and welfare funds of dozens of construction trade and other unions.

September 26, 2022 Katie Honan, THE CITY
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A group of union health funds this week sued global consulting firm McKinsey & Co. for its role in the opioid crisis — claiming they’ve spent so much money on members’ prescriptions and treatment for addiction that they’ve had to tap into pension funds to cover those costs.

The lawsuit was filed Tuesday in Queens Supreme Court on behalf of 50 local health and welfare funds covering dozens of construction trade and other unions, including ironworkers, laborers, metal polishers, and the union representing NYPD traffic enforcement agents.

In the suit, they claim McKinsey’s well-documented role working with Purdue Pharma, the maker of OxyContin, in pushing pain pills caused these organizations “substantial injury” as they incurred “unreimbursed costs related to the over-prescription of opioids.”

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The filing notes that McKinsey had multiple consulting contracts with companies including Purdue, which used aggressive sales strategies to push opioid prescriptions around the country.

The consulting giant entered into a “master consulting” agreement with Purdue in 2004 and spent years offering sales and marketing strategies on the sales of opioids, the suit alleges. In 2009, McKinsey was specifically tasked with helping the pharmaceutical company increase OxyContin sales — pushing not just individual prescriptions but for the highest dosages of the pills, according to the lawsuit.

McKinsey’s role in pushing pain pills caused the New York unions “substantial injury” as they incurred “unreimbursed costs related to the over-prescription of opioids,” their suit alleges.

This Feb. 19, 2013, file photo shows OxyContin pills arranged for a photo at a pharmacy in Montpelier, Vt.
Photo: Toby Talbot/AP

The plaintiffs’ lawyer, David Grossman, told THE CITY that each of the unions has spent millions of dollars in under a decade on the effects of the opioid crisis.

Those costs include not only prescriptions but detox treatments, rehabilitation facilities and other hospital stays for members, Grossman said.

Many of the health and welfare funds named in the suit represent union workers who do manual labor with higher chances of being injured on the job.

As opioids were over-prescribed, that caused healthcare ripple effects that forced the groups to find money through other funds, Grossman said.

“All the pension funds are in crisis right now because the opioid bills were so much they bled the unions dry, they had to short the fund,” he told THE CITY.

Getting in line

A spokesperson for McKinsey & Company did not respond to multiple emails seeking comment.

The 96-year old firm settled with 49 states in 2021 over its role working with Purdue and other companies that produce addictive painkillers like OxyContin.

The company was ordered to pay out nearly $600 million in damages to these states from the opioid crisis, which has killed hundreds of thousands of people.

New York received more than $32 million, which is being used to pay for prevention and treatment programs for opioid addiction, according to Attorney General Letitia James.

A poster on Bleecker Street urges people to treat opioid overdoses, Sept. 30, 2019.
Photo: Ben Fractenberg/THE CITY

But the money paid out to New York was not enough to cover the damages caused by the crisis, said Grossman, who added that the union health funds were not part of the original suit and are not exempt from filing for their own damages under that law.

He did not say how much money the unions are seeking in damages as they attempt to replenish some of the money paid out over the course of the opioid crisis — even if that can’t fully cover the stress and pain caused.

“Nobody’s going to be made whole by the end of this,” he said.

Other unions have previously taken other action against pharmaceutical companies.

In 2017, the International Brotherhood of Teamsters led a campaign to encourage the shareholders of pharmaceutical company McKesson Corp. to vote against a pay increase for the company’s CEO.

Earlier this year, McKesson settled with nearly every state in the nation and agreed to pay $7.4 billion over the next 18 years over its role in the crisis.

“The pharmaceutical companies have profited from the opioid epidemic that has wrecked families and ruined lives,” Louis A. Picani, the president and principal officer of Teamsters Local 456, one of the locals named in the new suit, told THE CITY in a statement.

“We have lost too many members and their loved ones. It has to end, and those responsible must be held to account.”

THE CITY is an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.

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