[Plura-list] McKinsey, consiglieri of the opioid crisis
Cory Doctorow
doctorow at craphound.com
Thu Jun 30 13:06:17 EDT 2022
Read today's issue online at: https://pluralistic.net/2022/06/30/mckinsey-mafia/
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Today (Juy 30) at 11AM PT/2PM ET, I'm appearing on a Zoom fundraiser for @davidSegalRI's Congressional bid; the headliner is @SenWarren; hope to see you!
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Today's links
* McKinsey, consiglieri of the opioid crisis: "Without admitting any wrongdoing."
* Hey look at this: Delights to delectate.
* This day in history: 2002, 2007, 2012, 2017, 2021
* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading
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🏊🏽♂️ McKinsey, consiglieri of the opioid crisis
McKinsey is a global "consulting" giant, with its tendrils in every unsavory industry from private ICE gulags to (mis)managing violent prisons to publicly funded private charter schools. Internally, McKinsey promotes itself as akin to the Jesuits *and* the Marines (no, really): "analytically rigorous, deeply principled seekers of knowledge and truth."
https://www.propublica.org/article/how-mckinsey-makes-its-own-rules
McKinsey has been embroiled in an endless series of grotesque scandals, caught "advising" companies and governments on projects that produced literal crimes against humanity, at scale. Naturally, the company downplays its role in these scandals, insisting that it was mostly involved in "marketing."
But McKinsey's core strength isn't marketing. If it was, the "McKinsey for Kids" program it launched earlier this year wouldn't be so fuckin' cringe. I mean, if you're LARPing Capitalism Jesuits, I guess it makes sense in a "Give us a child when they are seven and they are ours for life" way, but seriously, it's *awful*.
https://pluralistic.net/2022/02/15/management-jesuits/#pmc-jr
McKinsey's *real* strength is helping agencies and corporations avoid regulation, shirk their public duties, and deflect responsibility for the harms they create. Here's a brief selection of some of McKinsey's greatest hits:
* 2022: $100m in no-bid Trump Administration and state coronavirus contracts, awarded by former McKinsey execs working for the federal and state governments, for services that attracted a GAO price-gouging audit:
https://pluralistic.net/2020/07/15/3-frauds-in-a-trenchcoat/#failing-up
* 2017/8: $20m in Trump Administration contracts for ICE gulags and mass roundup and deportations. McKinsey advised radical cuts to food and health care:
https://www.propublica.org/article/how-mckinsey-helped-the-trump-administration-implement-its-immigration-policies
They later lied about their role in ICE's human rights abuses:
https://www.propublica.org/article/mckinsey-called-our-story-about-its-ice-contract-false-its-not
* 2017: $27.5m in NY state contracts to curb violence perpetrated by Riker's Island guards, which led to an *increase* in guard-on-prisoner violence, a fact that McKinsey hid for years, allowing the violence to continue:
https://www.propublica.org/article/new-york-city-paid-mckinsey-millions-to-stem-jail-violence-instead-violence-soared
McKinsey gives very bad management advice, and they suck at marketing, but they're really good at figuring out how to break the law and hide it from the public, then foil regulators and investigators when it comes to light. Nowhere is this clearer than in the opioid crisis.
The opioid crisis has its roots in cynical, deliberate efforts by pharma companies to create widespread addiction in the public. There were lots of opioid profiteers who got in on this action, but none were so central as the Sackler family, a secretive clan of hereditary pharma profiteers who used museum and art gallery "philanthropy" to launder their reputations.
Even as the Sacklers' family business Purdue Pharma was raking in billions from Oxycontin sales, the family went to enormous lengths to keep their names separate from the overdoses and misery their deliberate misselling of their product led to. I got a taste of this myself, when a lawyer for a firm with a history of intimidating journalists (motto: "The First Amendment guarantees a free press - not a consequence free press") threatened me on their behalf. The same firm went on to silence many #MeToo claimants and bragged about killing stories accusing powerful men of abuse:
https://www.thedailybeast.com/60-minutes-boss-hired-law-firm-over-metoo-story/
McKinsey was deep into the Sacklers' business. They pioneered many "innovative" programs for the drug company, like paying distributors a bounty to reward them for every overdose in their territory:
https://www.nytimes.com/2020/11/27/business/mckinsey-purdue-oxycontin-opioids.html
McKinsey's successes in pharma regulation cheating were not limited to opioids. The company was hired by Abvie/Abbott to help with stagnating profits resulting from a long period of failed R&D projects. They devised a strategy: simply raise prices on existing drugs, especially those that people couldn't stop without risking their lives.
One of these drugs was Humira, used to treat auto-immune diseases like Crohn's. Under McKinsey's guidance, Abvie made a cosmetic, molecule-scale "formula change" whose only effect was to allow Abvie to re-patent the drug (McKinsey suggested rewarding researchers who came up with these useless reformulations with free Iphones).
McKinsey then devised a disinformation plan to smear and discredit the older, off-patent formulations of these drugs, convincing doctors not to prescribe them and patients not to take them. Humira now costs $84k/year, representing an extra $1.4b in profits for its manufacturer:
https://pluralistic.net/2021/11/25/strikesgiving/#cool-story-pharma-bro
But McKinsey's real strength was in figuring out how to accelerate the opioid epidemic. McKinsey transformed itself into a one-stop shop for cheating regulators and served the whole industry at every level. We're only just learning exactly how deep McKinsey's culpability goes, thanks to an otherwise terrible defeat in the opium wars.
The Sacklers were incredibly well-defended. They had important allies in politics, on both sides of the aisle. Billionaires like Mike Bloomberg helped launder their reputation and keep consequences at bay. Bloomberg's newsroom maintained a "Friends of Mike" list of rich people who were off-limits to investigative reporters:
https://pluralistic.net/2020/02/29/friends-of-mike-enemies-of-the-people/#sacklerbergs
The Sacklers were on that list, and they returned the favor. After meeting with Bloomberg for "crisis communications" advice, the Sacklers hired Bloomberg's mayoral press-secretary Stu Loeser, who helped with Purdue's strategy of blaming opioid users for addiction and overdose deaths (Loeser later went back to work for Bloomberg's presidential campaign bid).
Despite all its friends in high places, eventually, the Sacklers had to face justice.
Sort of.
Facing a blizzard of private and governmental lawsuits, the Sacklers devised a bankruptcy strategy that would allow them to divest themselves of Purdue, dismiss all the suits, and keep billions in ill-gotten gains:
https://pluralistic.net/2021/05/23/a-bankrupt-process/#sacklers
The Sacklers' bankruptcy judge shopping is a case-study in elite impunity, a pristine example of a "megacase" that used "coercive restructuring techniques," "DIP financing agreements," "Hurry-up agreements" and other tactics to ensure that their case landed in front of a judge who would let them escape culpability and keep their money:
https://pluralistic.net/2021/08/07/hr-4193/#shoppers-choice
It's hard to overstate how terrible this bankruptcy decision was. A bankruptcy is supposed to restructure the debts of the bankrupt entity - in this case, Purdue Pharma, the disgraced husk of the Sacklers' business. But the deal also erased the liabilities of the Sacklers, who did *not* have to declare bankruptcy to get its protections:
https://pluralistic.net/2021/08/18/lets-make-a-deal/#art-of-the-deal
The one tiny bright light that emerged from this gross miscarriage of justice was that Purdue, McKinsey and other opioid criminals had to turn over their internal documents for a public archive that is now available to be mined by journalists, scholars, and grieving families:
https://pluralistic.net/2021/07/12/monopolist-solidarity/#sacklers-billions
Those archival analyses are starting to bear fruit, revealing the depraved criminality that went on behind the scenes. In May, Propublica published an important analysis showing that pharma companies paid cash bribes to doctors to get them to overprescribe their products:
https://pluralistic.net/2022/05/17/dollars-for-docs/#slaughter
Now, the *New York Times* has published its own analysis of the McKinsey records in the archive, by Chris Hamby and Mike Forsythe, a deep dive into McKinsey's culpability in ghastly deaths and ruined lives:
https://www.nytimes.com/2022/06/29/business/mckinsey-opioid-crisis-opana.html
McKinsey was an important part of Endo's marketing strategy for Opana, a drug that was far more powerful than Oxycontin. Opana abuse became widespread when Purdue was finally required to change Oxycontin tablets to make them harder to crush and snort/shoot. This change was driven by McKinsey, who leveraged their experience consulting for the FDA to help Purdue devise a strategy to escape the agency's wrath, by making "abuse-resistant" pills.
But even as McKinsey was working with its clients at Purdue to help get one over on its clients at the FDA, they were also consulting for Endo to figure out how to compete with Purdue. Endo devised an "anti-abuse" coating for Opana that was easily defeated, leading to widespread Opana injections. The "anti-abuse" coating caused blood poisoning that led to hospitalizations and deaths. Opana injections also led to a wave of HIV infections.
These alarming deaths, infections and hospitalizations triggered a crisis for Endo, who hired a new CEO: a McKinsey consultant named Rajiv De Silva. De Silva helped Endo structure a reverse-takeover with an Irish company, a "tax inversion" that allowed the company to evade the bulk of the taxes it owed. With the savings it thus realized, the company went on "a buying spree," snapping up generic opioid manufacturers.
At one point, Endo contemplated a shift of strategy to de-emphasize its opioid business in favor of other meds, but McKinsey intervened, calling it a distraction "at a time when we want to drive Opana." At McKinsey's behest, Opana targeted 3,000 more doctors to prescribe Endo. The spree only ended in 2017, when the FDA (finally) demanded that Endo be taken off the market.
Internal McKinsey memos boasted of the company's tight integration with the opioid industry: "We serve the majority of the leading players." Among those leading players: Johnson & Johnson, for whom McKinsey prepared a strategy entitled "Maximizing Value of the Narcotics Franchise," which explained how J&J's dominance of the poppy-extract sector could be used to completely corner the market.
(J&J also used a bankruptcy cheat to restructure its liabilities for a string of terrible crimes, including knowingly advising women to dust their vulvas with asbestos-tainted talcum powder and selling vaginal mesh implants that led to the complete excision of women's reproductive organs.)
McKinsey also did critical work for Mallinckrodt, another opioid profiteer that maintains the fiction that it is headquartered in the Irish tax-haven. McKinsey helped Mallinckrodt circumvent the DEA's anti-pill-mill quotas (McKinsey: "To suggest this work was intended to undermine relevant laws or regulations would be false").
Mallinckrodt was evidently happy with McKinsey's work - like Endo, Mallinckrodt poached a top McKinsey pharma consultant, Frank Scholz, for a leadership position, hiring Scholz to serve first as senior vice president of global operations and then president of generics.
But for all McKinsey's culpability in the opioid crisis's bottom-feeders, its work for Purdue was its crowning glory. Its market segmentation program broke down doctors into four categories: 'Early Adopting Experts,' 'Proactive Treaters,' 'Resigned Followers,' and 'ER Delayers,' noting worries about DEA scrutiny and addiction and devising tactics for overcoming these.
They created a peer-pressure program, teaching sales reps to "reassure" doctors by telling them that their peers were writing more Oxy scrips than they were.
Oxy sales dipped. Purdue VP Russell Gasdia wrote that these falling numbers were "due to less abuse." McKinsey helped formulate a strategy to address this, by targeting doctors "who would provide the greatest return on sales representatives' time."
They sought out doctors who had not previously prescribed Oxy, targeted them with messages about the safety of their drug, and encouraged them to start new patients it. The strategy worked, and Dr Ghatak, a McKinsey partner on the Purdue account, trumpeted its success, boasting "Overall, we are now deeply involved in nearly every facet of the company."
But McKinsey's tight integration with the opioid industry came into conflict with its other project: providing services to cities with opioid overdose and addiction crises. This conflict was resolved - in the opioid-makers favor. McKinsey's pharma division was given advance copies of the opioid-fighting plans McKinsey prepared for cities like Philadelphia. The objective - according to internal McKinsey memos, was to assess "whether this could create any waves on social media or from journalists that could be harmful to our Pharma clients."
By 2019, as lawsuits against opioid companies reached their peak, McKinsey decided to abandon its opioid work. Dr Ghatak, the McKinsey opioid specialist who'd boasted of the consultancy's integration in Purdue Pharma, sent his colleagues plans to downplay McKinsey's role in the crisis. He was subsequently fired for planning to destroy documents ahead of litigation:
https://www.nytimes.com/2020/11/27/business/mckinsey-purdue-oxycontin-opioids.html
McKinsey may have escaped real consequences for its role in the opioid crisis. Certainly, the majority of the opioid makers made off like bandits. Companies that played a central role in the crisis - Johnson & Johnson, Amerisourcebergen, McKesson and Cardinal Health - were able to claim tax-deductions for the fines they paid:
https://pluralistic.net/2021/02/14/a-fine-is-a-price/#deductible
And of course, these companies and their leaders were able to enter into settlements "without admitting to any wrongdoing."
Meanwhile, the opioid backlash has caused endless suffering for people managing serious pain, both chronic and acute. People dying in agony are denied opioids because of the strict regulations that were imposed *after* hundreds of thousands of Americans died of overdoses. People whose chronic pain had been responsibly and sustainably managed with opioids are now denied their prescriptions - both by overcautious docs and high-handed, unaccountable "anti-abuse" algorithms - and left to suffer.
The architects of the opioid crisis aren't suffering, though. Despite their bribery, scientific fraud, and deliberate targeting of vulnerable people, the wealthy people whom opioids made far wealthier got to keep (most of) their money. The archive that documents their depravity is important, but it's a poor substitute for accountability.
This elite impunity - enabled by a network of powerful lawyers, accountants, auditors, spin doctors, and consultants - has corrosive effects far beyond the immediate impacts like overdoses and addiction. The ability of the wealthy to get away with literal murder is behind the rise of conspiratorialism: the idea that rich people are plotting to kill you and your kids and getting away with it is only plausible because we know about all the times it's happened.
As I wrote in my book *How to Destroy Surveillance Capitalism*, conspiratorialism has less to do with Big Tech's (self-serving) claims to have perfected mind control via Big Data and behavioral psychology, and more to do with the erosion of trust arising from indisputable, real-world corruption:
https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59
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🏊🏽♂️ Hey look at this
* Section 230 Is a Last Line of Defense for Abortion Speech Online https://www.wired.com/story/section-230-is-a-last-line-of-defense-for-abortion-speech-online/
* Dungeons and Dragons team walk out over Hasbro's "lackluster" Roe response https://www.cbr.com/wotc-walk-out-hasbro-lackluster-scotus-roe-v-wade-ruling-response/ (h/t Payday Report)
* Medieval Times workers vote on union https://www.huffpost.com/entry/medieval-times-workers-first-union_n_62bb1d29e4b0d26a9b14fa17 (h/t Payday Report)
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🏊🏽♂️ This day in history
#20yrsago Rob Flickenger on community wifi https://web.archive.org/web/20020805004629/http://www.pcmag.com/print_article/0,3048,a=28138,00.asp
#20yrsago Hollywood asks Congress for Letters of Marque https://memex.craphound.com/2002/06/30/hollywood-asks-congress-for-letters-of-marque/
#15yrsago Google to HMOs: pay us and we’ll bury “Sicko” https://google-health-ads.blogspot.com/2007/06/does-negative-press-make-you-sicko.html
#15yrsago Kyle Baker reimagines Plastic Man by way of MAD, Eisner and Animaniacs https://memex.craphound.com/2007/06/30/kyle-baker-reimagines-plastic-man-by-way-of-mad-eisner-and-animaniacs/
#10yrsago Excellent list of reasons to hate standardized, high-stakes testing https://www.washingtonpost.com/blogs/answer-sheet/post/the-complete-list-of-problems-with-high-stakes-standardized-tests/2011/10/31/gIQA7fNyaM_blog.html
#5yrsago The Private Eye: a supervillain tries to bring the internet back to a world where the press are the cops https://memex.craphound.com/2017/06/30/the-private-eye-a-supervillain-tries-to-bring-the-internet-back-to-a-world-where-the-press-are-the-cops/
#5yrsago Up for auction: the never-seen original 1957 Haunted Mansion prospectus https://comics.ha.com/itm/memorabilia/the-haunted-house-haunted-mansion-disneyland-notes-and-plans-group-walt-disney-1957-/a/7171-95314.s?ic4=GalleryView-ShortDescription-071515
#5yrsago How to replace yourself with a very small shell script https://www.youtube.com/watch?v=l2btv0yUPNQ
#5yrsago Algorithms try to channel us into repeating our lives https://reallifemag.com/instant-recall/
#1yrago Corruption: Concentrated gains, diffused losses https://pluralistic.net/2021/06/30/based/#high-bidders
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🏊🏽♂️ Colophon
Today's top sources: Naked Capitalism (https://www.nakedcapitalism.com/).
Currently writing:
* Some Men Rob You With a Fountain Pen, a Martin Hench noir thriller novel about the prison-tech industry. Yesterday's progress: 605 words (21304 words total)
* The Internet Con: How to Seize the Means of Computation, a nonfiction book about interoperability for Verso. Yesterday's progress: 511 words (17683 words total)
* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. (92849 words total) - ON PAUSE
* A Little Brother short story about DIY insulin PLANNING
* Vigilant, Little Brother short story about remote invigilation. FIRST DRAFT COMPLETE, WAITING FOR EXPERT REVIEW
* Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION
* Spill, a Little Brother short story about pipeline protests. FINAL DRAFT COMPLETE
* A post-GND utopian novel, "The Lost Cause." FINISHED
* A cyberpunk noir thriller novel, "Red Team Blues." FINISHED
Currently reading: Analogia by George Dyson.
Latest podcast: Reasonable Agreement: On the Crapification of Literary Contracts https://craphound.com/news/2022/06/27/reasonable-agreement-on-the-crapification-of-literary-contracts/
Upcoming appearances:
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https://www.hope.net/
* DEFCON 30 (Las Vegas), Aug 13
https://defcon.org/html/defcon-30/dc-30-index.html
Recent appearances:
* UK Competition and Markets Authority Data, Technology and Analytics Conference 2022:
https://www.youtube.com/watch?v=Iovsp5aHcuU&list=PLJREEEp2I-xckXWl5O-_BELnqA0tf1bu-&index=3&t=21606s
* Supp-Lie Demand (Bad Faith podcast with Briahna Joy Gray):
https://www.patreon.com/posts/67550669
* The Sci-Fi Feedback Loop: Mapping Fiction’s Influence on Real-World Tech
https://csi.asu.edu/calendar/events/the-sci-fi-feedback-loop-mapping-fictions-influence-on-real-world-tech/
Latest book:
* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.
Upcoming books:
* Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin, nonfiction/business/politics, Beacon Press, September 2022
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