Risk Update

Consultant Conflicts of Interest Allegations — McKinsey Opioid Advisory Work, PwC Investigation Inspection

Posted Dan Bressler

“PwC advised DWS on sustainability while investigating greenwashing claims” —

  • “PwC was advising DWS [the mutual fund arm of Deutsche Asset Management] on sustainability at the same time as the accounting firm was investigating and dismissing whistleblower allegations of large-scale greenwashing at the asset manager, raising questions over the independence of the probe.”
  • “The allegations were made in mid-March by DWS’ former head of sustainability Desiree Fixler. Shortly after being sacked, she accused DWS of misrepresenting how it used environmental, social and governance metrics to analyse companies across its investment platform.”
  • “DWS denies all wrongdoing and mandated PwC to investigate the allegations days after the firm received the dossier.”
  • “At the same time, a different PwC team led by partner Nicole Röttmer was advising the asset manager on how to meet its goal of net zero emissions by at least 2050. DWS paid about €300,000 for PwC’s net-zero consulting, which has been concluded, according to people with direct knowledge of the matter.”
  • “Fixler told the FT she ‘would like to know how PwC managed the potential conflict of interest between its commercial ESG engagement and the audit in the same area’ and pointed out that she was not contacted at any point during the investigation.”
  • “In an executive summary of the investigation, PwC on May 21 stated that ‘no further data collection (eg via outreach to Ms Fixler) is necessary at this point”, arguing the “context and facts related to her allegations can be established in our view by available data items provided by DWS.'”

“McKinsey Never Told the FDA It Was Working for Opioid Makers While Also Working for the Agency” —

  • “Since 2008, McKinsey & Company has regularly advised the Food and Drug Administration’s drug-regulation division, according to agency records. The consulting giant has had its hand in a range of important FDA projects, from revamping drug-approval processes to implementing new tools for monitoring the pharmaceutical industry.”
  • “Yet McKinsey, which is famously secretive about its clientele, never disclosed its pharmaceutical company clients to the FDA, according to the agency. This year ProPublica submitted a Freedom of Information Act request to the FDA seeking records showing that McKinsey had disclosed possible conflicts of interest to the agency’s drug-regulation division as part of contracts spanning more than a decade and worth tens of millions of dollars. The agency responded recently that ‘after a diligent search of our files, we were unable to locate any records responsive to your request.'”
  • “Federal procurement rules require U.S. government agencies to determine whether a contractor has any conflicts of interest. If serious enough, a conflict can disqualify the contractor from working on a given project. McKinsey’s contracts with the FDA, which ProPublica obtained after filing a FOIA lawsuit, contained a standard provision obligating the firm to disclose to agency officials any possible organizational conflicts. One passage reads: ‘the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.'”
  • “Asked for comment, McKinsey did not assert that it disclosed potential conflicts to the FDA. But a spokesperson for the firm, Neil Grace, nonetheless maintained that ‘across more than a decade of service to the FDA, we have been fully transparent that we serve pharmaceutical and medical device companies. McKinsey’s work with the FDA helped improve the agency’s effectiveness through organizational, resourcing, business process, operational, digital, and technology improvements. To achieve its mission, the government regularly seeks support from additional experts who understand both the government’s mission and the industries’ practices. We take seriously our commitment to avoid conflicts and to serve the best interests of the FDA.'”