Last year, McKinsey agreed to pay more than $600 million to settle state investigations into its role in helping Purdue Pharma and other drugmakers fuel the opioid epidemic. The full story of McKinsey’s role in advising these companies - while also consulting for their government regulators - has never been told. That work was just the latest in a decades-long history of consulting for companies that sell addictive products. McKinsey, which was not involved in the settlement, said its work with Juul had focused on youth vaping prevention. Those marketing practices had included using young models, social media and flavored nicotine. This month, several years after McKinsey took the company as a client, Juul agreed to pay $438.5 million to settle government investigations into its marketing practices, though it did not acknowledge wrongdoing in the settlement. Although its product was conceived as a way to help adults stop smoking, Juul stood accused of marketing nicotine to teenage nonsmokers, addicting a new generation in much the same way the cigarette industry hooked their parents. For less than two years of work, McKinsey billed Juul $15 million to $17 million.īut the client came with a reputational risk, and McKinsey preferred to keep the arrangement secret. With grand ambitions, Juul needed marketing advice from McKinsey, the most respected voice in consulting, to help it on its way to a valuation greater than the Ford Motor Company. When McKinsey & Company, the global consulting giant, sat down with executives of Juul Labs in late 2017, the vaping company was well on its way to becoming a sensation among teenagers eager to latch on to the latest fad - inhaling flavored, supercharged nicotine vapor through a sleek new device easily hidden from parents and teachers. To hear more audio stories from publications like The New York Times, download Audm for iPhone or Android.
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