Washington, D.C. -Today, Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, held a hearing to examine the findings of the Committee’s investigation, presented in a staff report, which revealed major conflicts of interests at the heart of McKinsey’s work for the Food and Drug Administration (FDA) and for opioid companies such as Purdue Pharma. The investigation revealed that McKinsey failed to adequately disclose these conflicts of interest to the FDA-in apparent violation of contract requirements and federal law.
At the hearing, the Committee unveiled new documents showing how McKinsey created a roadmap for opioid companies to sell more OxyContin even as the epidemic raged. The new documents show McKinsey advised Purdue to target communities and doctors at the heart of the opioid epidemic, pay rebates for every overdose caused by their pills, and provide “cash prize" and “celebrity status" to sales representatives who sold the largest amount of dangerous opioids.
Today, Chairwoman Maloney also introduced the House version of Senators Peters’ and Grassley’s Preventing Organizational Conflicts of Interest in Federal Acquisition Act, which would help prevent organizational conflicts of interest in future contracts.
The Committee heard testimony from Bob Sternfels, Global Managing Partner of McKinsey & Company; Maura Healey, Attorney General of Massachusetts; Gillian Feiner, Senior Enforcement Counsel at the Office of the Attorney General of Massachusetts; and Jessica Tillipman, Assistant Dean for Government Procurement Law Studies at the George Washington University Law School.
Witnesses and Members addressed McKinsey’s pivotal role in pushing marketing and sales strategies for opioid manufacturers to boost opioid sales, and revealed that McKinsey collected $86 million from Purdue Pharma.
* Attorney General Healey explained: “McKinsey time and time again worked directly with Purdue to oppose efforts directed at safety and knowing what was happening with people getting sick, overdosing, and dying. McKinsey designed schemes to get more people on opioids and as a result more people suffered and died."
* Rep. Tlaib highlighted that McKinsey consultants minimized the severity of the opioid crisis, stating, “McKinsey didn’t just fail to acknowledge the severity" of the opioid epidemic, but was actively “disregarding all the information that was coming, very clearly, to you all."
* When Rep. Connolly asked Mr. Sternfels whether he had any regrets he wanted to share with the Committee, Mr. Sternfels responded: “I regret that we did not act sooner. If I could play this over, I would have put the client protocols in a decade earlier, I would have reached settlement even faster, and we would have pivoted from serving the manufacturers despite whatever goals there were, and I have already apologized for that, to actually being a part of the solution."
Members pressed Mr. Sternfels on McKinsey’s clear conflicts of interest in advising FDA on drug safety matters at the same time it was advising opioid companies -without adequately disclosing that information to FDA.
* When asked by Chairwoman Maloney whether her office’s investigation of McKinsey found the firm had advised Purdue to undermine federal drug safety measures, Attorney General Healey responded: “Absolutely. … McKinsey was actively coaching Purdue on how to band together with other opioid companies on how to fight FDA safety requirements while also working at the agency."
* Rep. Porter questioned Mr. Sternfels on McKinsey’s failure to disclose conflicts of interest to the FDA, asking, “who made you the conflict-of-interest czar for the federal government?" After Mr. Sternfels asserted that McKinsey “made clear in multiple instances that the individuals involved had experience in both pharmaceuticals and opioids," Rep. Porter responded: “They didn’t have experience, they were the identical humans working for both [FDA and Purdue] at the same time. Did you tell the FDA, did you make these disclosures, and then allow the government to decide whether there was a conflict of interest?" Sternfels was unable to say whether McKinsey had made any specific disclosures.
* Under questioning from Rep. DeSaulnier, Ms. Feiner testified: “Just look at the types of recommendations they were making to Purdue at the height of this crisis, when thousands of thousands of Americans were getting sick with the disease of addiction and dying." Ms. Feiner added, “That is the height of irresponsibility at a time when they were also working inside the FDA, learning how that agency worked, and trading on their relationships and their insider knowledge to get their private clients."
* Asked by Congresswoman Norton whether staffing the same individuals on contracts at both FDA and opioid manufacturers was concerning from a conflicts of interest perspective, Dean Tillipman agreed that “given the nature of the work, when there is the potential for overlap, the work could raise significant red flags" about the presence of an organizational conflict of interest.
Members demanded that McKinsey stop obstructing the Committee’s investigation by hiding behind client confidentiality.
* Rep. Bush stated, “we are demanding answers from one of the most evasive and secretive consulting companies in the world." She continued that, “Lawmakers have an obligation to call for both accountability and justice, transparency and honesty, an apology and reparations."
* Although Mr. Sternfels stated that his intention was to “work fully with this Committee," he refused to directly answer Chairwoman Maloney’s question about whether he would provide the clients lists and staffing information requested by the Committee over five months ago.
* When pressed by Rep. Pressley to fully cooperate with the Committee’s requests, Mr. Sternfels stated, “I am fully committed to continuing to work with the Committee. We know that we’re not done in answering your questions, and we want to pursue that, quite frankly, until you feel that you have the answers that you need."
* In her closing statement, Chairwoman Maloney addressed Mr. Sternfels’ stated commitment to transparency: “What we need now from McKinsey is what you claimed repeatedly that you support, and that is transparency. We expect you to fully comply with the Committee’s document requests by this Friday, so that we can see how widely and deeply your firm’s conflicts of interests run."
Witnesses and Members discussed the need for legislative reforms to strengthen federal contracting laws and increase transparency in consulting projects for the federal government.
* In her written remarks, Dean Tillipman stated that Committee’s report “reminds us that OCIs are an integrity issue that have the potential to undermine the quality and value of the services a government receives. When taxpayer dollars are at stake, a contractor’s undivided loyalties are paramount. It’s time to revisit the work the FAR Council began over a decade ago with respect to organizational conflicts of interest and bring greater awareness and compliance attention to this important issue."
* Chairwoman Maloney concluded the hearing by stating, “we intend to continue seeking legislative solutions to prevent companies like McKinsey from putting profits over American’s health and safety."
