In re McKinsey & Co. Nat'l Prescription Opiate Consultant Litig.
| Docket Number | 21-md-02996-CRB |
| Decision Date | 20 July 2023 |
| Parties | IN RE MCKINSEY & CO., INC. NATIONAL PRESCRIPTION OPIATE CONSULTANT LITIGATION This document relates to All NAS Actions |
| Court | U.S. District Court — Northern District of California |
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
This case arises out of McKinsey's participation in one of the most serious public health crises of the last twenty years.In 2017, the Judicial Panel of Multidistrict Litigation centralized lawsuits against manufacturers, distributors and pharmacies alleging that opioid manufacturers overstated the benefits and downplayed the risks of the use of their opioids and aggressively marketed these drugs to physicians.The lawsuits further allege that distributors and pharmacies failed to monitor, detect, investigate, refuse, and report suspicious orders of prescription opioids.
After discovery, a new set of lawsuits followed.These cases were filed against McKinsey, a global consulting firm, and concerned its role in providing sales and marketing strategies to opioid manufacturers-most notably, Purdue Pharma.The lawsuits against McKinsey prompted the creation of this separate MDL proceeding in 2021.
McKinsey has settled or is in the process of settling with various governmental entities, Native American tribes, and third-party payors.
Remaining in this MDL are actions filed by eight sets of private plaintiffs suing on behalf of minors with neonatal abstinence syndrome.McKinsey has moved to dismiss their complaint for failure to state a claim.
The NAS Plaintiffs are parents or legal guardians of children born with neonatal abstinence syndrome (NAS).[1] The children's birth mothers took opioids while pregnant.SeeNAS Compl. § IV(A)(dkt. 195-4).Some of the opioids were legally prescribed by the birth mothers' doctors, while others were obtained through illegal markets.Id.The mothers took opioids before and during their pregnancies.Id.
Taking opioids during pregnancy poses added risks, which is why drugs like OxyContin come with a warning: The use of opioids when pregnant should “be avoided to the extent possible.”Id.¶ 561.When a woman takes opioids during her pregnancy, the drugs pass through the placenta and adversely affect the fetus.Id.¶ 546.Infants born with NAS often exhibit symptoms of opioid withdrawal, such as tremors, seizures, overactive reflexes, and tight muscle tone.Id.¶ 548.They also cry excessively and have trouble feeding, leading to slow weight gain.Id.They develop breathing and sleeping problems as well as diarrhea, among other symptoms.Id.NAS infants are likely to experience long-term issues into adulthood, including developmental delays, motor problems, behavior and learning problems, emotional disorders, speech and language problems, sleeping issues, ear infections, and vision problems.Id.¶ 553.
Most opioids are Schedule II drugs under the Controlled Substance Act.SeeId.¶ 49.Schedule II drugs are the most dangerous drugs that may be legally prescribed and have a high potential for abuse, including risks of psychological or physical dependence.Seeid.But they also have accepted medical use: suppressing excruciating pain suffered by patients.Id.¶ 49.OxyContin is designed to be taken once or twice daily and is advertised to relieve pain for twelve hours.Id.¶ 52.
Purdue launched OxyContin in 1996, and marketed it as less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal than other pain medications.Seeid.¶¶ 51, 127.In 2007, Purdue pleaded guilty to fraudulently marketing and promoting OxyContin.Id. at ¶ 127.It simultaneously entered into a Corporate Integrity Agreement with the United States Department of Health and Human Services, which required Purdue to implement written policies on its compliance with federal health care program and Food and Drug Administration requirements, including for selling and marketing regulated products, compensation for persons engaged in the promoting and selling of Purdue's products, and information provided to healthcare providers.Id.¶¶ 128-29.
The agreement also imposed constraints on the sales and marketing of Purdue's products.In response, Purdue tasked McKinsey with developing a strategy to boost OxyContin sales despite those regulatory constraints.Seeid.¶¶ 131, 157.McKinsey advised Purdue on how to approach governmental regulators, id.§ IV(D)(6)(a), and identified granular growth sales opportunities for OxyContin that could generate $200-400 million in additional annual sales, id.§ IV(D)(6)(c).McKinsey helped Purdue target prescribing doctors through a project titled “Evolve to Excellence,” which was also known as “Project Turbocharge.”Id.§ IV(D)(8).Project Turbocharge's goal was to significantly bolster OxyContin sales, and McKinsey oversaw “the creation of target lists, internal dashboards to track progress, and changes to Purdue's incentive compensation plan.”Id.¶ 267.McKinsey used this data to create prescriber profiles and worked with Purdue's sales staff to develop sales messages likely to persuade specific prescribers.SeeId.§ IV(D)(6)(c)(i);id.¶¶ 222-24.McKinsey's strategy was a success: OxyContin sales increased by threefold under its guidance.Id.§ IV(D)(9).
McKinsey also advised and helped other opioid manufacturers, including Endo Pharmaceuticals and Johnson & Johnson, to increase opioid drug sales.Seeid.§ IV(E).
In 2020, Purdue again pleaded guilty to improper marketing of OxyContin and other opioids that occurred from 2010 to 2018-i.e., during the period that McKinsey provided consulting services to Purdue.Id.¶ 508.“Purdue pleaded guilty to a dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 331,353, violating anti-kickback laws, and ‘using aggressive marketing tactics to convince doctors to unnecessarily prescribe opioids-frivolous prescriptions that experts say helped fuel a drug addiction crisis that has ravaged America for decades.'”Id.¶ 509.The plea agreement does not expressly name McKinsey but references it as the “consulting company.”Id.¶ 510.In a separate, settled civil action, the Department of Justice alleged that Purdue implemented many of McKinsey's recommendations, including much of Project Turbocharge.Seeid.¶¶ 511-13;Opp., Ex. A., at 20 ¶ 105.[2]
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted.To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.”Bell Atl. Corp. v. Twombly,550 U.S. 544, 570(2007).A claim is facially plausible when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”Ashcroft v. Iqbal,556 U.S. 662, 678(2009)(citation omitted).There must be “more than a sheer possibility that a defendant has acted unlawfully.”Id.
While courts do not require “heightened fact pleading of specifics,”a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.”Twombly,550 U.S. at 555, 570.In deciding whether the plaintiff has stated a claim upon which relief can be granted, the Court accepts the plaintiff's allegations as true and draws all reasonable inferences in favor of the plaintiff.SeeUsher v. City of Los Angeles,828 F.2d 556, 561(9th Cir.1987).However, the court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.”In re Gilead Scis. Sec. Litig.,536 F.3d 1049, 1055(9th Cir.2008).
The parties have informed the Court that, in this MDL, only the NAS Plaintiffs' claims remain active, and only the portions of the parties' briefs specific to the NAS Plaintiffs remain relevant.Dkt. 562.The NAS Plaintiffs' claims generally fall into four categories: (1) negligence-based claims (negligence, negligent misrepresentation, and negligence per se); (2) fraud and deceit-based claims; (3) public nuisance; and (4) joint or vicarious liability (civil conspiracy and aiding and abetting).The four West Virginia NAS Plaintiffs also bring specific state law claims against McKinsey.
As an MDL court, this Court“must apply the law of the transferor forum, that is, the law of the state in which the action was filed.”In re Anthem, Inc. Data Breach Litig.,162 F.Supp.3d 953, 976(N.D. Cal.2016)(citingIn re Vioxx Prods. Liab. Litig.,478 F.Supp.2d 897, 903(E.D. La.2007)).A review of the relevant state laws governing the NAS Plaintiffs' claims indicates that, for purpose of addressing this motion, the elements and standards among the several states are materially the same.
The threshold question in all actions in negligence is whether a duty was owed.To bring a negligence claim, the Plaintiffs must demonstrate that they are owed a legal duty by McKinsey to use due care, a breach of that legal duty, and the breach as the proximate or legal cause of the resulting injury.SeeIleto v. Glock Inc.,349 F.3d 1191, 1203(9th Cir.2003).It has long been established that individuals generally have “no duty to control the conduct of another.”Tarasoff v. Regents of Univ. of Cal.,17 Cal.3d 425, 435(1976);Brown v. USA Taekwondo,11 Cal. 5th 204, 214(2021).“A duty exists only if the plaintiff's interests are entitled to legal protection against the defendant's conduct.” ...
To continue reading
Request your trial