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  1. #1
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    Nov 2007
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    mind boggling McKiney recommendation:OxyContin

    https://www.nytimes.com/2020/11/27/b...n-opioids.html

    Even by today's crazy standards, this is mindboggling. As a way to "turbo charge" sales, McKinsey recommended to Purdue Pharma (hello, Sacklers) that they pay a rebate to pharmacies for each overdose their patients experience.

    For those who mock our health care system, it's yet another talking point. It sounds like something from A Modest Proposal, but it doesn't appear to be satire.

  2. #2
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    Nov 2014
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    The People's Republic of Travis County
    Quote Originally Posted by budwom View Post
    https://www.nytimes.com/2020/11/27/b...n-opioids.html

    Even by today's crazy standards, this is mindboggling. As a way to "turbo charge" sales, McKinsey recommended to Purdue Pharma (hello, Sacklers) that they pay a rebate to pharmacies for each overdose their patients experience.

    For those who mock our health care system, it's yet another talking point. It sounds like something from A Modest Proposal, but it doesn't appear to be satire.
    McKinsey employs some amazingly intelligent people. It's always fascinating when such people utterly lack common sense.

  3. #3
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    May 2007
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    Baltimore, MD
    Quote Originally Posted by AustinDevil View Post
    McKinsey employs some amazingly intelligent people. It's always fascinating when such people utterly lack common sense.
    Is it common sense, or a basic moral code? This seems like a laser-like focus on profits but a failure to consider if this approach has any moral complications.

  4. #4
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    Feb 2010
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    Colorado
    Quote Originally Posted by ryetales View Post
    Is it common sense, or a basic moral code? This seems like a laser-like focus on profits but a failure to consider if this approach has any moral complications.
    I suspect there is a guy on this board with considerable consulting experience, maybe even with McKinsey, who has valuable insight into this story.

  5. #5
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    Dec 2009
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    North of Durham
    Quote Originally Posted by MartyClark View Post
    I suspect there is a guy on this board with considerable consulting experience, maybe even with McKinsey, who has valuable insight into this story.
    Or gal. We have lots of female posters here too...

    I started reading this article with a lot of skepticism but it sounds pretty damning. It seems like McKinsey was well aware of the moral and ethical issues involved here and should have been the adult in the room.

    I have many friends who have worked for McKinsey at some point. I am very indirectly using them right now, but it is just for a very basic number crunching exercise. Their role is often one where they can claim plausible deniability as they are presenting the information to help someone reach a decision (usually they serve as a cya for someone who has to make a tough choice but want backup). In this case they seem to be fully endorsing and encouraging this plan, which is not ok.

  6. #6
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    Nov 2007
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    Quote Originally Posted by AustinDevil View Post
    McKinsey employs some amazingly intelligent people. It's always fascinating when such people utterly lack common sense.
    Indeed, I worked with them on a number of occasions...my interface with them one time was a Blue Devil grad with a law degree from Harvard, who went on to run a film studio...they work their "associates" to the bone and then discard half of them every year...

    Interestingly enough, they had a major project with the company where I worked, and they made a MAJOR, super embarrassing mistake, which was stunning given their abundance of talent...

  7. #7
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    Nov 2014
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    The People's Republic of Travis County
    Quote Originally Posted by ryetales View Post
    Is it common sense, or a basic moral code? This seems like a laser-like focus on profits but a failure to consider if this approach has any moral complications.
    Same thing, IMhO: it would be common sense to recognize the moral failings (and also the reputation risk, and also the legal exposure) that would be inherent in the recommended approach.

  8. #8
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    Feb 2010
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    Colorado
    Quote Originally Posted by CrazyNotCrazie View Post
    Or gal. We have lots of female posters here too...

    I started reading this article with a lot of skepticism but it sounds pretty damning. It seems like McKinsey was well aware of the moral and ethical issues involved here and should have been the adult in the room.

    I have many friends who have worked for McKinsey at some point. I am very indirectly using them right now, but it is just for a very basic number crunching exercise. Their role is often one where they can claim plausible deniability as they are presenting the information to help someone reach a decision (usually they serve as a cya for someone who has to make a tough choice but want backup). In this case they seem to be fully endorsing and encouraging this plan, which is not ok.
    I had a particular person in mind - guy.

  9. #9
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    Dec 2009
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    North of Durham
    Quote Originally Posted by MartyClark View Post
    I had a particular person in mind - guy.
    I suspect there are some women I know who currently or in the past worked at McKinsey who lurk on this board. So not just guy.

    Though I also know that what happens at McKinsey stays at McKinsey. Buttigieg needed clearance to reveal the cases he worked on while running for president, because all McKinsey employees sign their lives away saying that they won't reveal who they worked for (a good friend spent a while in Atlanta working on a case for "a global soft drink company.") And unless someone worked on this specific case, even if they could talk, they wouldn't have a lot to add.

    But I digress...

  10. #10
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    Colorado
    Quote Originally Posted by CrazyNotCrazie View Post
    I suspect there are some women I know who currently or in the past worked at McKinsey who lurk on this board. So not just guy.

    Though I also know that what happens at McKinsey stays at McKinsey. Buttigieg needed clearance to reveal the cases he worked on while running for president, because all McKinsey employees sign their lives away saying that they won't reveal who they worked for (a good friend spent a while in Atlanta working on a case for "a global soft drink company.") And unless someone worked on this specific case, even if they could talk, they wouldn't have a lot to add.

    But I digress...
    I'm not sure why you keep insisting that there are women on this board. I agree. Or that women work for McKinsey. I agree.

    The person I'm referring to is a male. That's all. I'm not trying to speak to any broader gender issues.

  11. #11
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    I donít know, is anyone really surprised by the action of any of the parties involved here? Maybe Iím just a little cynical because of, well, business history. There are many fewer whistleblowers than there are whistles that should be blown, IMO.

  12. #12
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    Nov 2007
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    Quote Originally Posted by bundabergdevil View Post
    I donít know, is anyone really surprised by the action of any of the parties involved here? Maybe Iím just a little cynical because of, well, business history. There are many fewer whistleblowers than there are whistles that should be blown, IMO.
    I have no illusions whatsoever about McKinsey and other consultants, but even by their standards, I find paying what would seem to be Bizzaro World compensatory damages to pharmacies for dead patients to be highly unusual.

  13. #13
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    Quote Originally Posted by budwom View Post
    I have no illusions whatsoever about McKinsey and other consultants, but even by their standards, I find paying what would seem to be Bizzaro World compensatory damages to pharmacies for dead patients to be highly unusual.
    No, I find it pretty abhorrent, too. I guess there are just lots of business cases that go something like this --- Company X makes and sells product Y, which either through its manufacture or use results in human harm. But Company X wants to continue to make and sell product Y because doing so is how they make good money and there aren't any specific regulatory measures to prevent them from continuing to make money on Y even though they know good and well that Y causes harm, even lots of it. So, somewhere in a room, the company discusses risk mitigation strategies, legal set-aside fees, document controls, and other strategies to help them continue to sell Y more.

    And, having worked in a large company that did the above, I've also been surprised at how many rank-and-file employees adopt a victim blaming mindset. Oh, those people downstream from the chemical plant that all got cancer? They're just after the money. I'm sure somewhere in the Perdue/McKinsey discussion ranks there is some of that going on, too.

  14. #14
    Quote Originally Posted by budwom View Post
    I have no illusions whatsoever about McKinsey and other consultants, but even by their standards, I find paying what would seem to be Bizzaro World compensatory damages to pharmacies for dead patients to be highly unusual.
    I agree, it’s a highly unusual recommendation which could expose McKinsey to substantial liability. It wouldn’t have good jury optics!

    Seems like a more prudent McKinsey recommendation would have been to assist all business partners against legal claims. I assume that was the intended rebate purpose.

  15. #15
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    Quote Originally Posted by Jeffrey View Post
    Seems like a more prudent McKinsey recommendation would have been to assist all business partners against legal claims. I assume that was the intended rebate purpose.
    But this was about sales, not about risk. Which of these would generate more sales?

    1) "Hello Pharmacist. We want to give you money in case you get sued for selling our drug."

    or 2) "Hello Pharmacist. If you sell so much of our drug that someone keels over, we will give you a bonus!"
    I don't know what you are doing right now, but if you aren't listening to the DBR Podcast, you're doing it wrong.

  16. #16
    Quote Originally Posted by JasonEvans View Post
    But this was about sales, not about risk. Which of these would generate more sales?

    1) "Hello Pharmacist. We want to give you money in case you get sued for selling our drug."

    or 2) "Hello Pharmacist. If you sell so much of our drug that someone keels over, we will give you a bonus!"
    If I was a Pharmacist, then definitely #1. I donít believe (maybe you do?) most Pharmacists would try to kill a patient to earn a bonus.

    However, risk is certainly a consideration in all business functions. I think the rebate was a very poorly designed risk payment.

  17. #17
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    Quote Originally Posted by Jeffrey View Post
    If I was a Pharmacist, then definitely #1. I donít believe (maybe you do?) most Pharmacists would try to kill a patient to earn a bonus.

    However, risk is certainly a consideration in all business functions. I think the rebate was a very poorly designed risk payment.
    Ha, so when we check out of CVS and get the (ludicrous) two foot long receipt, maybe they could add a note such as "kindly have your estate notify us in case this prescription kills you so that we can receive our rebate from McKinsey, Thank You Loyal CVS customer!

  18. #18
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    Feb 2007
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    Steamboat Springs, CO
    Quote Originally Posted by bundabergdevil View Post
    No, I find it pretty abhorrent, too. I guess there are just lots of business cases that go something like this --- Company X makes and sells product Y, which either through its manufacture or use results in human harm. But Company X wants to continue to make and sell product Y because doing so is how they make good money and there aren't any specific regulatory measures to prevent them from continuing to make money on Y even though they know good and well that Y causes harm, even lots of it. So, somewhere in a room, the company discusses risk mitigation strategies, legal set-aside fees, document controls, and other strategies to help them continue to sell Y more.

    And, having worked in a large company that did the above, I've also been surprised at how many rank-and-file employees adopt a victim blaming mindset. Oh, those people downstream from the chemical plant that all got cancer? They're just after the money. I'm sure somewhere in the Perdue/McKinsey discussion ranks there is some of that going on, too.
    This quote is most appropriate here:
    Upton Sinclair (b. 1878, d. 1968) in The Story Of A Patriot: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."
    Sage Grouse

    ---------------------------------------
    'When I got on the bus for my first road game at Duke, I saw that every player was carrying textbooks or laptops. I coached in the SEC for 25 years, and I had never seen that before, not even once.' - David Cutcliffe to Duke alumni in Washington, DC, June 2013

  19. #19
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    Jan 2010
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    Quote Originally Posted by sagegrouse View Post
    This quote is most appropriate here:
    Smart fella that Mr. Sinclair.

  20. #20
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    Sep 2007
    Location
    Bethesda, MD
    I don't want to defend the particular McKinsey statement, but economists like me always want to remind people that the optimal number of bad things happening is often not zero.

    Consider speed limits for cars. About 40,000 people died in the U.S. last year in car accidents, the global total is a large multiple of that, and most of these deaths are young people in good health. It's a terrible tragedy. We could greatly cut down on those deaths if we reduced speed limits substantially. Why don't we do that? It seems that we have, collectively, made the judgment that we're willing to trade off the time savings and convenience of faster travel for thousands more deaths each year. There's nothing intrinsically wrong with that collective decision.

    More controversially, consider Covid restrictions. We could drive the infection rate close to zero if we all stayed in our house (which is what I'm pretty much doing myself), but opinions vary about whether that's worth the cost. Behavior in epidemics are involves a wider range of ethical issues than do speed limits (though there, too, my behavior affects others' risk), but it's still not clear that we should drive the risk of infection to zero.

    With respect to drugs, what if there are drugs that offer very substantial benefits, including added years of life, that also cause death in a small fraction of the treated? If the adverse reaction rate is .00000001 percent, we'd probably say go ahead with the medicine. If the adverse rate is 50 percent, then it's a different story. The general point is that there are tradeoffs to be considered, and that it's possible to underdistribute or overdistribute a medication. Profit motives may lead to over-distribution, but excessive risk aversion by policymakers might lead to under-distribution.

    All that said, the opiod epidemic has been a disaster, and they were obviously wildly overprescribed in many parts of the U.S., in part due to overzealous drug company marketing.

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