Since 2008, McKinsey & Company has regularly advised the Food and Drug Administration’s drug-regulation division, according to agency records. The consulting giant has had its hand in a range of important FDA projects, from revamping drug-approval processes to implementing new tools for monitoring the pharmaceutical industry.
During that same decade-plus span, as emerged in 2019, McKinsey counted among its clients many of the country’s biggest drug companies — not least those responsible for making, distributing and selling the opioids that have ravaged communities across the United States, such as Purdue Pharma and Johnson & Johnson. At times, McKinsey consultants helped those drugmaker clients fend off costly FDA oversight — even as McKinsey colleagues assigned to the FDA were working to bolster the agency’s regulation of the pharmaceutical market. In one instance, for example, McKinsey consultants helped Purdue and other opioid producers push the FDA to water down a proposed opioid-safety program. The opioid producer ultimately succeeded in weakening the program, even as overdose deaths mounted nationwide.
Yet McKinsey, which is famously secretive about its clientele, never disclosed its pharmaceutical company clients to the FDA, according to the agency. This year ProPublica submitted a Freedom of Information Act request to the FDA seeking records showing that McKinsey had disclosed possible conflicts of interest to the agency’s drug-regulation division as part of contracts spanning more than a decade and worth tens of millions of dollars. The agency responded recently that “after a diligent search of our files, we were unable to locate any records responsive to your request.”
Federal procurement rules require U.S. government agencies to determine whether a contractor has any conflicts of interest. If serious enough, a conflict can disqualify the contractor from working on a given project. McKinsey’s contracts with the FDA, which ProPublica obtained after filing a FOIA lawsuit, contained a standard provision obligating the firm to disclose to agency officials any possible organizational conflicts. One passage reads: “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.”
Agency officials rely on disclosure to ensure that they have the information they need to consider whether a contractor’s other business relationships risk slanting its judgment. “Contractors have the obligation to disclose potential conflicts, and then the government has an obligation to figure out how to deal with it,” said Jessica Tillipman, an assistant dean and government procurement law expert at George Washington University Law School.
Asked for comment, McKinsey did not assert that it disclosed potential conflicts to the FDA. But a spokesperson for the firm, Neil Grace, nonetheless maintained that “across more than a decade of service to the FDA, we have been fully transparent that we serve pharmaceutical and medical device companies. McKinsey’s work with the FDA helped improve the agency’s effectiveness through organizational, resourcing, business process, operational, digital, and technology improvements. To achieve its mission, the government regularly seeks support from additional experts who understand both the government’s mission and the industries’ practices. We take seriously our commitment to avoid conflicts and to serve the best interests of the FDA.” (McKinsey is a sponsor of ProPublica’s local virtual events programming.)
McKinsey’s failure to disclose its industry engagements deprived the FDA of the opportunity to consider whether, for example, the overlap between McKinsey’s government and pharmaceutical industry projects and the potential financial incentives at play constituted a conflict, experts said.
“For a contractor like McKinsey not to disclose the companies it is working for has all the appeal of the Addams Family on Halloween hiding Uncle Fester in the basement so as not to scare the neighborhood,” said Charles Tiefer, a professor of government contracting at the University of Baltimore Law School.
An FDA spokesperson, Shannon Hatch, said: “The FDA’s procurement activities are governed by the Federal Acquisition Regulations (FAR). The agency takes our role awarding contracts seriously and we work to ensure the agency maintains high standards of integrity as set forth in the FAR.”
McKinsey’s extensive opioid company consulting eventually began coming to light, starting with a 2019 ProPublica report. The firm’s opioid work has provoked widespread criticism, spawned a welter of lawsuits and led the firm to pay nearly $600 million this year to settle legal claims made by all 50 states, as well as five U.S. territories and the District of Columbia. It also prompted McKinsey to issue a statement in which the firm acknowledged that it “fell short” of its standards in advising opioid makers while also denying that it “sought to increase overdoses or misuse and worsen a public health crisis.” The firm pledged not to work on opioid-related projects going forward.