McKinsey and Company, a leading consulting agency, has agreed to pay US$573 as a settlement for advising Purdue Pharma, a drug company, on how to “supercharge” opioid sales. The agreement to pay the settlement was reached after the management of the consultation firm agreed with attorney generals of 47 states, Massachusetts court records revealed. This action disrespects human rights, especially for the patients of the drug produced by Purdue Pharma. The decision to settle was made in February 2021 when the Company’s unethical advice to the pharmaceutical organization was disclosed. For about a decade, McKinsey advised Purdue on ways to brand and market opioids and influence doctors into prescribing high doses of opioids. The consulting firm also ensured that Purdue maximized its profits by offering guidance on evading pharmaceutical prescriptions. In addition, McKinsey was also known to be involved with other opioid-related works, including consulting advice to Johnson & Johnson, Mikkinckrodt Pharmaceuticals, Endo International, among other organizations.
The decision to pay for the settlement was reached after thousands of documents and emails showed how McKinsey passed unethical and unlawful advice to Purdue. Most of the guidance was on methods of marketing and evading regulations set by pharmaceutical regulatory bodies. The McKinsey opioid controversy gained nationwide coverage primarily because of two main factors. First and perhaps the greater was drug overdoses being a nationwide problem, as evidenced by the national overdose death rate of 19.8 as of 2016. It was shocking to see the most prominent consulting organization known to give consultancy services to corporations and government agencies involved in such a severe ethical scandal. The scandal had huge media attention, and many scholars have debated the proper ethical action that should be taken against the Company.
The decision of the government to pursue the McKinsey opioid scandal and to fine the consulting firm showed that ethical issues apply to both direct perpetrators and their advisors. McKinsey agreed to pay the penalties within 60 days, but Purdue Pharma could not cover its $8.3 billion in penalties and instead filed for bankruptcy for protection. In the aftermath of the scandal, McKinsey became a target of various tort lawsuits from different states, with litigation’s filed as far as Canada. The attorney general of Massachusetts stated that the government’s action was about holding accountable those who created and profited from the opioid epidemic. The decision was a massive win for the government and ethical supporters, as Pharma knew that the drug was addictive, yet it continued to promote it as safe. Doing so violated the people’s right to autonomy of choice.
After paying the settlement, McKinsey issued a statement saying that it was confident that its work with Purdue was lawful. It emphasized that it agreed to the settlement without finding or admitting wrongdoing or liability. However, Purdue Pharma did less marketing in states with legal restrictions against oxycontin, the other mane for opioids. If Mckinseys’s actions were ethical and lawful, why did they vary according to state and be less with states with stricter regulations? This question brings a lot of ethical dilemmas for the members of the public who are the clients of the consulting agency. The public members should only trust people and companies, people across unites states continue to suffer because of unethical activities by organizations. Thus, the public members must be careful of organizations that hurt various parties searching for profitability.
Case Issues
In this case, the decision-makers are the general public, as they have to choose whether to believe McKinsey is ethical or not. The dilemma occurs when the McKinsey management, through their official website, states that even though they paid for the settlement, they were not liable for the OxyContin drug produced by Purdue Pharma. This dilemma looks like double talk and puts the decision-makers into an ethical dilemma. Members of the public can punish McKinsey’s low ethical standards by first not being their clients. They can also punish them by not buying products from companies that use their services. Nevertheless, before punishment is taken, the public members have to decide whom to trust. McKinsey and Co is a reputable company with a record with some blemishes or the litigators, attorneys, and critics like the attorney general of Massachusetts, the latter’s motive not being clear.
Members of the public are also faced with an ethical dilemma on whether to sue McKinsey or not. After the first settlement in February 2021, many claims, some with no sufficient evidence, have been brought up against the consolation firm in what some now call copy cut get rich schemes. With so many governmental officials now seeking to protect an organization that many thought previously to be rogue, bring an issue to the general public, especially in deciding the best path to follow. When dealing with this type of scenario, decision-makers should encourage pragmatism because unethical people and organizations use deceptions to conceal their traits.
The decision-makers who are members of the general public are also faced with the issue of avoiding McKinsey and letting it fall into bankruptcy or supporting it and risking the loss of lives due to unethical practices. Letting McKinsey fall comes with negative repercussions, including loss of jobs for friends and relatives, loss of excellent services provided by the firm, and loss of revenues for the states. McKinsey has for a long time argued that it fights for inclusion, environmental sustainability, and human rights. The organization’s professional website mckinsey.com states that it is value-driven and aspires to meet the highest professional, legal, and ethical standards.
Ethical Dilemma
The members of the general public are faced with two conflicting but undesirable alternatives. To believe McKinsey had honest intentions when advising Purdue on how to improve its sales and that it did not advocate for addictive drugs and deception. They can also choose not to believe the honesty of their actions and punish them by either avoiding their services or taking legal action against them. Letting a company that does not have a reputable past continue functioning could lead to disasters. Similarly, removing excellent cooperation from the market could leave it hard to fill gaps. If the public members choose to sue McKinley based on their previous wrongdoing, they may push an already reformed firm into bankruptcy. On the other hand, if the consulting giant is left to have its way, it may continue to offer dangerous guidelines to rather good institutions.
Members of the public can punish unethical behavior in organizations in different ways. One of the common forms of punishment is filling litigation’s against organizations. When unethical behavior is brought before a judge, the organization can decide to settle before facing the jury. They can also take a position of innocence and defend their name in a court of law. The public members may also decide to punish the organization by avoiding its products, which would reduce profits, making the organization change its stance. Both alternatives have negative implications and thus create an ethical dilemma for the decision-makers.
Members of the public as the decision-makers have to decide several ethical dilemmas. In doing so, they have to ensure the decision made is for the good of all or the majority. Utilitarianism was first introduced as a progressive liberty theory where all people were treated equally. The affected parties include McKinsey, Purdue, Managers of McKinsey, Managers of Purdue, Doctors, Governments, local and state, and patients. Others were the attorney general of Massachusetts, all the 49 states, the federal government, the addicts of the substance, the consumers of the drug, lawyers, friends, and relatives of the addicts, and other international bodies.
Decision-makers need to analyze the effectiveness of using opioids and the damages caused by the substance. Opioids have become the preferred treatment of moderate-to-severe acute and end-of-life pain, although evidence of their effectiveness for chronic non-cancer pain remains contradictory and inconclusive. The members of the general public faced dozens of ethical dilemmas. One was a decision they had to make place OxyContin in the category of addictive drunks or not. The public should avoid OxyContin unless prescribed by a doctor to ensure its safety. Banning OxyContin, however, would mean that some individuals who needed it for critical medication would suffer.
Having a better society is a fundamental goal of utilitarianism, and decisions based on this are usually good. The public members, being the utilitarian decision-makers, would need to ensure that the happiness and pleasure of all the above-mentioned groups are considered when choosing the ethical path to adopt. For instance, telling a significant employer like McKinley and Co to shut its operations would increase unemployment. Thousands of people would be left in the streets and without a home, which would lead to high levels of crime and reduced morality rituals that are neither associated with ethics nor utilitarianism.
In the case under review, McKinsey did not follow the ethical theory of utilitarianism. Instead, the agency focused on the good of one party, its client, at the expense of the other party of the people taking drunk. The consulting agency placed the goal of ensuring the profitability of its client Purdue Pharma even at the expense of giving people addictive drugs in the form of opioids. Companies like Purdue Pharma and its advisor McKisley employ harmful means to maximize profits through unethical means. The employees, the shareholder’s other stakeholders gained but only for a short time before the Company was forced to pay the compensation. Some people, including addicts of opioids, the government, and friends and relatives of the people affected by the epidemic, felt a huge loss.
Since the decision to be made will have negative consequences, public members have to choose based on the utilitarianism theory. The decision-makers will need to look at the demographics and choose the action that hurts fewer people. They will also need to check the severity of their actions, for instance, the pain the employees will suffer after losing jobs against the pain patients will suffer after unknowingly consuming the addictive medication. Other factors to be considered are economic, legal, social, and political factors in the case study. Public members would have to punish McKinley and Company based on utilitarian calculations. Punishing the consulting firm does a greater good to the majority of people going forward as it will make organizations aware they will be accountable for any unethical actions, regardless of whether they did the action or gave advice.