Guest Essays, Letters to the Editor, Opinion

Guest essay: McKinsey & Company profits at the expense of W.Va.

by Sean Hornbuckle

The opioid epidemic ravaged the state of West Virginia. The death rate in West Virginia from opioid overdoses far outstripped the rest of the United States, and at the peak of the epidemic, thousands of West Virginians died every year from overdoses. West Virginia has begun the long road of recovery, but we will continue to face the effects of the opioid crisis for generations.

How did so many West Virginians become addicted to prescription drugs? Over the past few decades, America’s most powerful pharmaceutical companies and their business advisors strategically targeted West Virginia’s doctors and patients to increase opioid use and maximize profits.

The New York-based management consulting firm McKinsey & Company heavily exacerbated the opioid crisis, proving to be the greatest ally of pharmaceutical companies at the expense of West Virginia. The firm provided strategies for pharmaceutical companies such as Purdue Pharmaceuticals, Endo and Johnson & Johnson to expand the market for deadly opioids by persuading hesitant doctors to prescribe more pills. Then, amidst a public health emergency, McKinsey guided these pharmaceutical companies through regulatory battles, leaving West Virginia communities decimated and thousands dead.

McKinsey & Company paid nearly $600 million in settlements from lawsuits over its central role in the opioid crisis. West Virginia sued McKinsey & Company and received a $10 million settlement, and that money went toward opioid addiction prevention and recovery programs. However, despite overwhelming evidence of McKinsey’s harm, federal and state governments continue to shovel taxpayer dollars to McKinsey, a bitter pill to swallow for those who demand justice.

McKinsey continues to put corporate interests ahead of the common good, and the ensuing harm extends beyond the opioid crisis. Take Prima Wawona, a farm that was one of the country’s largest producers of peaches. McKinsey directed the company to make changes in its operations, even though McKinsey doesn’t know much of anything about peach farming. After two years of McKinsey’s misguided advice, the company filed for bankruptcy and is now liquidating. Investors, lenders and creditors will lose over $1 billion. The largest creditor in the bankruptcy was McKinsey, claiming that it was owed a whopping $8 million for its horrific advice.

According to a lawsuit, McKinsey received millions of dollars in fees from Prima Wawona at the direction of Paine Schwartz (a private equity firm “specializing in sustainable food chain investing”), even while it was helping lead the business toward bankruptcy. As a result, more than 5,000 employees recently received notice that they are being laid off, and a previously thriving business is now being sold for parts.

McKinsey’s alliance with Paine Schwartz to destroy Prima Wawona is part of a pattern of behavior. As John Oliver poignantly described in an episode of his show, Last Week Tonight with John Oliver, “essentially, McKinsey is a firm that projects a huge amount of confidence to sell a frequently unremarkable product at sky-high prices.” The firm is known to advise for mass firings, no matter the consequences.

McKinsey must be held accountable for their actions. West Virginians can begin by petitioning state representatives to pledge never to allocate funds to McKinsey and similar entities ever again. The time has come to sever ties with McKinsey & Company and prioritize the well-being of West Virginia over corporate profit.

Sean Hornbuckle (D-Cabell) is the Minority Leader in the West Virginia House of Delegates.