Editor’s note: Welcome to Editors' (re)View, our editors’ takes on things going on in the pharma world that deserve some extra consideration.
McKinsey under fire for alleged role in opioid crisis
Earlier this week, the Guardian reported that the U.S. Justice Department is actively conducting a criminal investigation into whether McKinsey, a management consulting firm, contributed to the opioid crisis.
The allegations are regarding whether McKinsey’s marketing advice helped escalate the sales of addictive painkillers, fueling a national health crisis characterized by widespread addiction and overdose deaths. It also explores potential health care fraud, examining if McKinsey's strategies led to fraudulent claims being made to federal health programs such as Medicare.
The opioid crisis in the United States reached epidemic proportions, with over 645,000 people dying from opioid drug overdoses between 1999 and 2021.
The recent investigation is also scrutinizing McKinsey’s conduct regarding document management, following the firm’s admission that it fired two partners who had discussed deleting opioid-related documents, raising questions about possible obstruction of justice.
Previously, McKinsey resolved opioid-related lawsuits by agreeing to nearly $1 billion in settlements across all states, various local governments, and Native American tribes. In 2019, McKinsey ceased all consulting for opioid-related businesses. Despite these settlements, the firm has admitted no wrongdoing.
Purdue Pharma, at the center of opioid litigation, has yet to respond to inquiries. The company filed for bankruptcy in 2019, and pleaded guilty to charges related to its opioid marketing in 2020. In March 2021, Purdue Pharma filed a Chapter 11 reorganization plan and a disclosure statement in the United States Bankruptcy Court for the Southern District of New York.
This plan, aimed at resolving thousands of opioid lawsuits, proposed reallocating over $10 billion in value from Purdue’s assets to claimants and communities affected by the opioid crisis. The reorganization would dissolve Purdue and transfer its operations to a new entity dedicated to addressing the opioid crisis, not owned or operated by state or local governments.
The Sackler family, Purdue's owners, agreed to contribute nearly $4.3 billion over nine years to the settlement. Funding for the new entity included an immediate $500 million cash infusion post-bankruptcy, with another $1 billion anticipated from its operations by 2024. The entity would be governed by an independent board appointed in consultation with Purdue by state and local governments.
As the investigation unfolds, the actions of McKinsey and Purdue remain under close scrutiny, with the outcomes potentially, and hopefully, reshaping legal and ethical standards within pharma and consulting industries. — Andrea Corona
Lilly gains "ground zero" for generic manufacturing
This week, Eli Lilly announced that it's acquiring a sterile injectable manufacturing facility from Nexus Pharmaceuticals.
Located in Pleasant Prairie, Wisconsin, the FDA-approved facility is Nexus’ only in-house manufacturing site. The company spent $100 million building the state-of-the-art facility in 2019 and only recently commenced commercial production.
Nexus is a family-owned company that has celebrated its commitment to providing lifesaving generic medicines manufactured in America. On its website, the company touts the facility as “ground zero for establishing generic pharmaceutical manufacturing for the U.S."
While Lilly did not directly say it plans to use the facility to make its blockbuster type 2 diabetes and weight loss med, tirzepatide, the drugmaker said the plant will “support increased demand for the company's medicines and expand its capacity to produce "the latest life-changing medicines."
For Lilly, the move isn’t surprising, given the scramble for sterile fill-finish capacity, and the surging demand for weight loss injectables. It of course comes on the heels of Novo Holdings paying $16.5 billion to buy Catalent so that it could sell Catalent’s three fill-finish sites to Novo Nordisk.
And while you can't control how new owners utilize a purchase, using the facility to make weight loss drugs seems to be a departure from Nexus’ original intention to fulfill a critical unmet medical need and deliver lifesaving treatment options. As I work on next month's cover story on reshoring, I can't help but wonder what this acquisition says about the challenges of domestic generic drug production. — Karen Langhauser
