Bioregnum, Politics

Novartis now says that it paid Trump’s attorney $1.2M — and then throws ex-CEO Joe Jimenez under the bus

BioRegnum — The view from John Carroll


John Carroll, Editor

With Novartis stuck squarely in the middle of a media frenzy centered on payments it made to a shell company controlled by Michael Cohen, the personal attorney for President Donald Trump, the pharma giant offered a few more details Wednesday about their relationship. It starts with an admission that Novartis actually paid Cohen more than a million dollars, and it was followed by an extraordinary private admission that then CEO Joe Jimenez was sold on the notion that Cohen could private access to the administration.

In their new statement you can see in its entirety below, Novartis says it engaged with Cohen in early 2017, agreeing to pay the president’s attorney $100,000 a month for 12 months to provide guidance on “healthcare policy matters.” After their first meeting, Novartis said, the pharma giant determined that Cohen “would be unable to provide the services that Novartis had anticipated,” and decided to call a halt to any future meetings. The payments, however, had to continue under the contract.

Novartis then vehemently denied a suggestion by Stormy Daniels’ attorney Michael Avenatti — who revealed a few of the $99,980 payments from Novartis as well as more corporate contributions and a $500,000 payout from Russian oligarch Viktor Vekselberg — that the payments could have been tied to a high-profile dinner soon-to-be Novartis CEO Vas Narasimhan attended in Davos with Trump at the end of January. He wasn’t involved in any way, Novartis insists indignantly.

Suggestions to the contrary clearly misrepresent the facts and can only be intended to further personal or political agendas as to which Novartis should not be a part.

Novartis then repeated its assertion that it had been in contact with the special counsel’s office under Robert Mueller and now considers the matter with the president’s chief fixer closed.

But not quite.

Deeply embarrassed at being caught up in the Michael Cohen/Stormy Daniels scandal, senior execs at Novartis followed up with some reporters to throw Jimenez under the bus by acknowledging that the company was paying for access to the Trump administration, on the ex-CEO’s orders.

Cohen “contacted us after the new administration was in place,” the official told NBC News. “He was promising access to the new administration.”

That’s old fashioned influence peddling, if true.

Citing a company insider, Stat News’ Ed Silverman reports that Cohen reached out to Jimenez directly, and that the CEO then directed the company to make the deal. And even though the arrangement quickly derailed, the company claims, Cohen later went back to new CEO Vas Narasimhan for a new deal, who rejected the overture.

The insider told Stat:

“With a new administration coming in, basically, all the traditional contacts disappeared and they were all new players. We were trying to find an inroad into the administration. Cohen promised access to not just Trump, but also the circle around him. It was almost as if we were hiring him as a lobbyist.”

That narrative underscores the company’s laser focus on protecting Narasimhan, at the expense of Jimenez, who left at the beginning of February after a long run at the top.

I’ve been trying to reach Jimenez directly, but without success. A company spokesperson told me he didn’t know how to contact the ex-CEO.

The Cohen fiasco adds to Novartis’ growing list of ethical woes, including issues with the way it rewarded doctors in China. And it faces even bigger questions with its approach to US policy, which will be the subject of a much anticipated speech by Trump on Friday.

You can expect more questions on Novartis’ role in the scandal after that appearance, particularly if the administration goes easy on Big Pharma in trying to keep Trump’s repeated promise to “slash” drug prices.

Here’s the statement:

In February 2017, shortly after the election of President Trump, Novartis entered into a one year agreement with Essential Consultants.  With the recent change in administration, Novartis believed that Michael Cohen could advise the company as to how the Trump administration might approach certain US healthcare policy matters, including the Affordable Care Act.   The agreement was for a term of one year, and paid Essential Consultants 100,000 USD per month.  In March 2017, Novartis had its first meeting with Michael Cohen under this agreement.  Following this initial meeting, Novartis determined that Michael Cohen and Essential Consultants would be unable to provide the services that Novartis had anticipated related to US healthcare policy matters and the decision was taken not to engage further.  As the contract unfortunately could only be terminated for cause, payments continued to be made until the contract expired by its own terms in February 2018.

The engagement of Essential Consultants predated Vas Narasimhan becoming Novartis CEO and he was in no way involved with this agreement.  Contrary to recent media reports, this agreement was also in no way related to the group dinner Dr. Narasimhan had at the World Economic Forum in Davos with President Trump and 15 Europe based industry leaders.  Suggestions to the contrary clearly misrepresent the facts and can only be intended to further personal or political agendas as to which Novartis should not be a part.

In terms of the Special Counsel’s office, Novartis was contacted in November 2017 regarding the company’s agreement with Essential Consultants. Novartis cooperated fully with the Special Counsel’s office and provided all the information requested.  Novartis considers this matter closed as to itself and is not aware of any outstanding questions regarding the agreement.


The best place to read Endpoints News? In your inbox.

Comprehensive daily news report for those who discover, develop, and market drugs. Join 30,600+ biopharma pros who read Endpoints News by email every day.

Free Subscription

RAPS Convergence 2018

Director/Sr Director, Oncology/Immuno-Oncology
Aro Biotherapeutics Company Denver, CO
Director/Sr. Director Oncology
Aro BioTx Philadelphia, PA
Manufacturing Associate – Upstream
Molecular Templates Austin, TX
Scientist, Process Development
Molecular Templates Austin, TX
GMP Supervisor - Downstream
Molecular Templates Austin, TX
Quality Control (QC) Associate
Molecular Templates Austin, TX

Visit Endpoints Careers ->