Bioregnum, Politics

Novartis sacrifices its top attorney in an attempt to quell clamor over $1.2M in Cohen payments — while ex-CEO Jimenez struggles to explain

BioRegnum — The view from John Carroll


Faced with a growing crisis over its $1.2 million in payments to President Donald Trump’s personal attorney Michael Cohen, Novartis announced early Wednesday that the company’s top lawyer has abruptly resigned in hopes of bringing the whole tawdry affair to an end.

“Although the contract (with Cohen) was legally in order, it was an error,” said Felix Ehrat, group general counsel of Novartis, in a statement. “As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end.”

The chances of that happening, though, are zero. If anything, this move will only heighten pressure on Novartis to fully explain why it agreed to pay $1.2 million to an attorney whose only relevant attraction to the pharma giant was his close personal tie to the president. That remains the bottom line after ex-CEO Joe Jimenez gave an interview to Forbes’ Matthew Herper, where he struggled to explain why the company hired Cohen.

“If we were the experts on policy, he was the expert on the way that they think, together as a team it could be a way for us to better navigate what was going to be a pretty sticky Affordable Care Act Repeal-and-Replace,” Jimenez told Herper in the interview.

Jimenez also took “full responsibility,” saying that his replacement, Vas Narasimhan, was not involved. And he repeatedly emphasized the uncertainty around Trump’s election for the move to gain some clarity.

“He was one of the very few number of people who knew people in the administration,” Jimenez noted.

Ehrat’s sudden exit — as well as the Jimenez interview — underscore how deeply the company has been battered by the controversy and the growing list of questions Narasimhan still faces. Company execs had privately been pinning the blame on Jimenez, who stepped down from the CEO’s job at the end of January. Adding the general counsel to the list of responsible players — and sending him through the exits — does nothing to address the many questions the company faces , while clumsy attempts to apologize and refocus on the business underscore its inability to manage events.

The 41-year-old Narasimhan — who has never explained when he first heard about the Cohen deal — is still facing a drumbeat of ominous news.

We now hear that Switzerland’s Office of the Attorney General has been discussing the possibility of launching their own probe into the payments, though the officials there say that no formal probe is now underway. And two prominent Democratic senators, Elizabeth Warren and Richard Blumenthal, joined Ron Wyden and Patty Murray in scolding the company and asking some pointed questions about exactly why it paid Cohen that much and what it got in return.

“Given these ongoing matters, the unusual series of payments.by Novartis to the President’s personal attorney raise obvious questions about corruption and whether Novartis and the Trump Administration were engaged in a pay-for-play operation,” Warren and Blumenthal wrote, ahead of their list of queries.

Joe Jimenez

While the din of disapproval rose around the Basel headquarters, Narasimhan himself reportedly took to the phone to tell thousands of the company’s managers that Novartis needs to clean up its act. According to a report from Bloomberg, Narasimhan told his managers by phone that the company had to move to rethink its relationship with lobbyists and regain the public’s trust.

Company execs knew back in November that they could face a hue and cry, when Robert Mueller’s team came in to ask questions about the relationship. Cohen himself has been at the center of a media circus surrounding the revelation that he had paid porn star Stormy Daniels $130,000 to keep quiet about an alleged affair with Trump — writing a check from the same shell company that Novartis paid into. But Novartis never disclosed anything about the federal investigation in public filings.

Exactly how Narasimhan plans to respond while remaining hunkered down inside the company’s walls, though, remains to be seen. Does the CEO — now stoutly defended by a phalanx of media contacts who insist the company will cooperate with all investigations — submit to a Q&A with a friendly or perhaps highly reputable media outlet? Does he start to publicly address the persistent questions surrounding Novartis payments? Does someone else get the ax?

Novartis recognizes it faces a crisis. But for now, there’s still no clear plan to deal with it in any kind of public way.


Image: Vas Narasimhan. GETTY IMAGES


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