District Judge Staci Yandle denied McKinsey & Company’s motion to amend its notice of removal in an opioid marketing lawsuit after a Belleville doctor who was joined as a defendant said she lives in both Illinois and Missouri.
On April 29, Yandle denied McKinsey’s motions for leave to amend notice of removal for lack of good cause shown. She also denied the defendant’s request for jurisdictional discovery and motion to file a supplemental brief in opposition to the plaintiffs’ motions to remand “as the requested relief is not necessary for this court’s determination of the pending motion for remand.”
McKinsey filed a motion for leave to amend its notices of removal on April 28 through attorney James Brodzik of Hinshaw & Culbertson LLP in Belleville. Similar motions were filed in the cases filed by both Madison and St. Clair County. It argues that defendant Dr. Naheed Bashir’s declaration filed April 26 sets forth “her strong connections to Missouri.”
“McKinsey believes it is prudent to seek leave to file this amended notice of removal in light of the additional supporting facts set forth in the subsequently-filed declaration,” the motion stated. “McKinsey nonetheless contends that its original notice properly and sufficiently alleged jurisdictional facts supporting defendant’s domicile in Missouri, and respectfully submits in any event that the court can deem the notice of removal amended by the information contained in the declaration.”
According to Bashir’s response to questions raised by McKinsey, Bashir testified that she is registered to vote in Illinois and has an Illinois driver’s license. However, wrote that she splits her time evenly between homes in Belleville and St. Louis.
Bashir also testified that she had intentions of moving to Missouri.
“I had the intention, and still have the intention, to move out of the state of Illinois,” the response states. “Over a year ago, I bought a condominium in St. Louis, with the expectation that I would soon retire there. I have much stronger ties to the community in St. Louis. I did a three year residency at St. Louis University Hospital, worked at the Barnes Jewish Hospital in St. Louis for several years, and opened my own practice for two years in Cape Girardeau, Missouri.”
Bashir wrote that her husband spent 17 years as a public defender in downtown St. Louis and her children attend school in Missouri.
“I have long preferred Missouri’s lower cost of living, and do not like what I perceive as corruption and unfair treatment in Madison County,” the response states.
She added that she retains her Pakistani citizenship and may choose to return there.
“Regardless, I do not and did not see a future in Illinois,” she wrote.
Ann Callis of Holland Law Firm filed the complaints on behalf of Madison and St. Clair Counties. McKinsey is accused of negligence, negligent misrepresentation, fraud and deceit and unjust enrichment. McKinsey is accused of public nuisance, conspiracy to violate the Illinois Consumer Fraud Act, negligent undertaking and civil aiding and abetting.
The lawsuits allege McKinsey constructed a marketing plan to increase opioid sales despite Purdue Pharma’s prior guilty plea for misbranding OxyContin. They also allege Bashir inappropriately increased OxyContin prescriptions.
Callis wrote that on May 10, 2007, Purdue Frederick Company, the parent company of Purdue Pharma LP, pleaded guilty to the misbranding of OxyContin. Purdue agreed to a corporate integrity agreement for five years. Callis argues that despite the constraints, Purdue and its controlling owners, the Sacklers, still intended to maximize OxyContin sales.
The Sacklers allegedly sought to maximize opioid sales in a short time to make Purdue “appear either as an attractive acquisition target or merger partner to another pharmaceutical manufacturer or as a creditworthy borrower to a lender.”
Purdue and the Sacklers allegedly asked global management consulting firm McKinsey for help.
“Purdue was the proverbial hot potato,” Callis wrote. “The Sackler family hired McKinsey to help them hand it to someone else.”
When the corporate integrity agreement ended, “McKinsey’s ongoing relationship with Purdue flourished,” Callis wrote. A marketing strategy called “Project Turbocharge” was implemented in 2013 to increase opioid sales. OxyContin sales peaked, tripling since the 2007 guilty plea.
“McKinsey is responsible for the strategy that accomplished this,” Callis wrote. “It presented specific plans to Purdue, which Purdue adopted and spent hundreds of millions of dollars implementing. The result: a final spasm of OxyContin sales before the inevitable decline of the drug.”
McKinsey has faced scrutiny for its business practices, including its work on opioid campaigns for Purdue.
“However, the price for McKinsey’s role in the opioid crisis is more than scrutiny,” Callis wrote. “Like any other participant in the arena, McKinsey is liable for its deeds.”
“McKinsey’s task was to thread the needle: to increase OxyContin sales given the strictures imposed by the 5-year Corporate Integrity Agreement,” she added. “This McKinsey did, turbocharging the sales of a drug it knew fully well was addictive and deadly, while paying at least tacit respect to the Corporate Integrity Agreement.”tegy allegedly employed the tactic of “patient pushback,” meaning patients lobbied for OxyContin when their doctors expressed reservations.
Despite the plan to make Purdue appear as an attractive business opportunity, the Sacklers never sold the company.
McKinsey’s marketing strategy began by countering emotional messages about overdoses.
“McKinsey advised Purdue to market OxyContin based on the false and misleading notion that the drug can provide ‘freedom’ and ‘peace of mind’ for its users, and concomitantly reduce stress and isolation,” Callis wrote.
By promising “hope,” the strategy allegedly avoided representations regarding withdrawal, drug tolerance, addiction or drug abuse as specified in the corporate integrity agreement.
McKinsey's marketing strategy included targeting existing high prescribers by selling them more OxyContin.
"Defendant Bashir exemplifies the types of prescribers McKinsey urged Purdue to target," Callis wrote. "With the acquiescence and participation of these high prescribers in McKinsey's plan to increase OxyContin sales, McKinsey's plan would drive real value for Purdue and the Sacklers."
The suit states that additional physicians not yet identified also increased opioid prescriptions as a result of McKinsey's conduct.
McKinsey also encouraged Purdue to sell higher doses of OxyContin, the suits allege.
“McKinsey understood that the higher the dosage strength for any individual OxyContin prescription, the greater the profitability for Purdue,” Callis wrote. “Of course, higher dosage strength, particularly for longer periods of use, also contributes to opioid dependency, addiction and abuse.”
McKinsey urged Purdue to adopt quotas and bonus payments as motivation for sales representatives to sell as many OxyContin prescriptions as possible, the suits state. McKinsey also suggested that if sales representatives spent less time training, they could “squeeze an additional 5% of physical calls per day out of its newly less-trained sales force.”
McKinsey increased sales by increasing the size of the opioid market. This was done by encouraging the sales of generic competitors.
“Notably, this notion that the size of a company’s market share is not as important as the size of the overall market in which it competes is a core insight of McKinseys’ granular approach to identifying corporate growth opportunities,” Callis wrote.
By October 2020, Purdue agreed to plead guilty to "a dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act” through improper marketing of OxyContin and other opioids again from 2010 to 2018.
“The new plea agreement does not identify Purdue’s co-conspirators, and McKinsey is not identified by name in the agreement. Instead, McKinsey is referred to as the ‘consulting company,’” Callis wrote.
On Dec. 5, 2020, McKinsey issued a statement regarding its work with Purdue in response to the guilty plea.
“As we look back at our client service during the opioid crisis, we recognize that we did not adequately acknowledge the epidemic unfolding in our communities or the terrible impact of opioid misuse and addiction on millions of families across the country. That is why last year we stopped doing any work on opioid-specific business, anywhere in the world.
"Our work with Purdue was designed to support the legal prescription and use of opioids for patients with legitimate medical needs, and any suggestion that our work sought to increase overdoses or misuse and worsen a public health crisis is wrong. That said, we recognize that we have a responsibility to take into account the broader context and implications of the work that we do. Our work for Purdue fell short of that standard,” the response states.
Madison and St. Clair Counties seek a judgment in their favor for actual damages caused by the opioid epidemic, including costs for medical care, treatment costs for overdoses, treatment costs for infants born with opioid-related medical conditions, costs for providing care for children whose parents suffer from opioid-related disability or incarceration, law enforcement costs relating to the opioid epidemic, and costs associated with drug court and other resources expended.
They also seek compensation for past and future costs, an “abatement fund,” punitive damages, attorneys’ fees and court costs.
Bashir filed a motion to dismiss the complaints on March 18 through attorney Talat Bashir.
The motion states that the allegations against Bashir are vague and ambiguous and do not state a claim on which relief can be granted.
“A bare reading of the allegations stated in the complaint reflect no mention of any patient or prescription,” the motion states. “The complaint is based upon the false assumptions which makes is impossible for the defendant to answer the vague and assumed allegations with the facts from the record kept in defendants office.”
Callis filed a response in opposition to Bashir’s motion to dismiss on April 21. She argues that Bashir’s motion provides no explanation for her allegations and fails to mention any patient or prescription. She also argues that the complaint provides sufficient allegations against Bashir.
“A fair reading of the 64-page complaint shows that the allegations stated against Dr. Bashir more than satisfy the pleading requirements of this court and state a claim for relief such that the motion to dismiss must be denied,” Callis wrote.
Callis explained that Bashir is a physician alleged to have contributed to the opioid epidemic by over-prescribing opioids.
“The complaint provides a clear statement of Dr. Bashir’s alleged role in the claims asserted in plaintiff’s complaint. The complaint also makes clear that Dr. Bashir is precisely the type of prescriber that McKinsey targeted and advised Purdue to focus on.
“Though it does not name any particular patient or prescription, it does not seek damages on behalf of any particular patient or as a result of any particular prescription. Though such evidence may be useful as evidence to prove the case against Dr. Bashir, the notice pleading standard applicable does not require the pleading of such evidence,” Callis wrote.
She added that specific patients and prescriptions are also subject to physician-patient privilege and would be “impossible to include in an initial pleading.”