Ruthless Fealty to Management, Capital, and the Market

Older and bigger than its major rivals, McKinsey is widely considered the gold standard in management consultancy — reportedly serving more than two thousand institutions worldwide and advising many of the world’s most powerful governments and corporations. Once dubbed “the single greatest legitimizer of mass layoffs” by author Duff McDonald, the company’s basic philosophy might be summed up as ruthless fealty to management, capital, and the market: the work of management consultancy is most often concerned, in the words of former McKinsey consultant turned critic Anand Giridharadas, with “increasing investors’ share of profits by reducing labor’s share.”

Perhaps unsurprisingly, its internal culture strongly mirrors the Ivy League context from which it so often recruits. As a 1993 article in Fortune magazine put it: ​“Fellows from McKinsey sincerely do believe they are better than everybody else. Like several less purposeful organizations — Mensa, Bohemian Grove, Skull and Bones, the Banquet of the Golden Plate — McKinsey is elitist by design.” Though the company’s vast alumni network includes people of various political persuasions (Republicans Tom Cotton and Bobby Jindal, for example, are ex-McKinseyites), its overall ethos, much like that of a typical Ivy League school, is more culturally and politically liberal than conservative. As an anonymous former McKinsey consultant explained last year:

McKinsey consultants gave 27 times more money to Hillary Clinton’s campaign than to Donald Trump’s. The members of my team attended the Women’s March while serving an agency shaped by the man they marched against. The firm hires from top universities and many of its consultants have graduate degrees, both strong predictors of liberal political tendencies.

Undergirded by an overriding loyalty to its clients’ interests, this ethos apparently does little to constrain the firm’s actual work.

A year ago, for example, the New York Times revealed astonishing details about McKinsey’s role in aiding President Trump’s anti-migrant and detention policies. Having been retained by Immigration and Customs Enforcement (ICE), its consultants reportedly made a series of recommendations so extreme that even some career ICE personnel grew uncomfortable — among them restricting the caloric intakes of people in detention, cutting spending on medical supplies, and streamlining the deportation process.

Elsewhere involved with various despotic governments, corrupt figures, and authoritarian regimes, McKinsey’s involvement in the Trump administration’s cruel immigration agenda is just one incident among many to have earned it unwanted scrutiny in recent years — and almost certainly won’t be the last.

An Unflinching Commitment to the Bottom Line

As the Purdue Pharma case quite morbidly illustrates, McKinsey’s managerial expertise and logistical know-how are highly sought after for good reason: when a corporation or government comes calling, it can be reasonably sure that the firm’s consultants will execute their assigned task with zeal, efficiency, and an unflinching commitment to the bottom line (whatever it happens to be).

Though the company has not been charged or sued by the federal government, its involvement in Purdue Pharma’s activities was clearly not passive or peripheral. As the settlement agreement released by the DOJ makes abundantly clear, McKinsey consultants worked closely with Purdue Pharma management both to identify the causes of declining sales and to formulate a strategy by which they could be reversed.

On the first score, their diagnosis was a simple one: “Both the reformulation and safeguards against medically unnecessary prescriptions” (in the settlement’s language) were to blame, and the “retail channel” (as the company informed Purdue Pharma) was “under intense scrutiny and direct risk.” In other words, increased awareness about the dangers of excessive OxyContin prescription had caused distributors and public authorities alike to become more cautious — a development which threatened to reduce profits. A 2014 budget presentation to Purdue Pharma’s board would subsequently identify newfound safeguards against the unnecessary prescription of opioids as “challenges” to its revenue goals.

Elsewhere in the settlement agreement, the language proves equally clinical and no less sinister. To help Purdue Pharma overcome declining sales, McKinsey consultants employed sophisticated analytics techniques to identify potential areas for increasing sales and rates of prescription such that the company’s marketing and distribution efforts could be targeted more effectively. Garnishing the initiative with the peppy, vaguely collegiate label “Evolve to Excellence,” McKinsey sent a memo to Purdue Pharma asking it to approve or reject E2E, which it suggested would “Turbocharge the Sales Engine.” As the settlement agreement details:

E2E took a multifaceted approach to increasing OxyContin prescribing and Purdue’s profits. The consulting company [McKinsey] recommended, among other strategies, refreshing Purdue’s marketing messaging — particularly around titration to higher, more lucrative dosages — and undertaking strategies to ensure prescriptions would be filled. At its core, however, E2E focused on intensifying marketing to the very highest-volume prescribers in the country by targeting them with increased frequency and minimizing sales representative discretion in identifying prescribers to target. The E2E call plans targeted the highest-volume prescribers in the country, and the program demanded stricter adherence with call plans than had existed in years past.

There is little room for interpretation here. As the federal investigation makes clear, both McKinsey and Purdue Pharma, whose representatives worked together in overseeing E2E, had full understanding of its purpose, i.e., “generating prescriptions from extreme high-volume prescribers” and pursued it anyway.

Even more disturbing is a 2017 presentation reviewed by the Times in which McKinsey presented additional options to help Purdue Pharma increase sales, among them the idea of offering a rebate to distributors for every OxyContin overdose attributable to the pills they’d sold. The presentation even included projections for how many customers at companies like CVS and Anthem would either die or develop opioid use disorders (at the former, for example, it projected 2,484 “events” in 2019, estimating a cost of $36.8 million to Purdue at a rate of $14,810 per rebate).

Despite not being charged for its involvement, internal communications from the company make clear its representatives became concerned about potential legal repercussions in 2018 when Massachusetts undertook a lawsuit against Purdue Pharma and discussed the possibility of eliminating evidence. Having suddenly discovered ethics amid a growing PR disaster, McKinsey has since announced that it will no longer “advise any clients worldwide on opioid-specific business” and even issued a rare apology for its role in OxyContin sales.

In 2018, having spent years helping Purdue Pharma spike OxyContin sales, it even published a report titled: “Why we need bolder action to combat the opioid epidemic.”

The Corporate Equivalent of Manslaughter

Those entering the cloistered world of McKinsey via the twenty-first-floor lobby of its Manhattan headquarters will pass a framed poster which lists the two ostensible pillars of the company’s mission: the first, to “observe high ethical standards”; the second, to “put client interests ahead of the Firm’s.” The Purdue episode, much like McKinsey’s involvement with ICE, is deeply clarifying about which generally takes precedence. No one put it better than Giridharadas, who recently remarked: “This is the banality of evil, M.B.A. edition. They 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.”

In America today, drug use, like poverty, is often perceived as an individual choice or the product of a morally defective lifestyle. But the opioid epidemic has been a top-down affair since its very beginning, in many ways closer to the sterile boardrooms of corporate America and ivied architecture of Oxford and Yale than any poor neighborhood in Ohio or West Virginia, fed more by capital’s visceral greed and insatiable demand for profit than the individual agency of its victims.

Driven by its overriding loyalty toward the former, McKinsey’s best and brightest effectively helped Purdue Pharma carry out the corporate equivalent of manslaughter, subordinating human life to cold numerical calculus in the process. Last month’s multibillion-dollar settlement may bring an end to the case, but as Ralph Boggs — who was prescribed OxyContin in the early 2000s and who recently lost his son to a fentanyl overdose — told the New York Times: “We can’t get our loved ones back. To me that’s not worth anything. You can’t write a dollar amount for that.”