Senators Assail Novartis Account of Cohen Connection
(Bloomberg) -- U.S. Senate Democrats are questioning the truthfulness of Novartis AG’s account of its relationship with Donald Trump’s lawyer, saying its ties were deeper than the Swiss drugmaker has acknowledged.
An investigation by the lawmakers provided excerpts from emails and other documents to show that the business arrangement between Michael Cohen and the company extended longer than Novartis has previously said. While the pharma giant said it decided not to engage further with Cohen after an initial meeting with him in early 2017, Trump’s personal fixer and then-Chief Executive Officer Joe Jimenez had multiple discussions over the next six months, according to the report released Friday.
The drugmaker “mischaracterized the relationship between Novartis and Mr. Cohen,” the report said.
Emails in the report show that when Cohen tried to persuade Novartis to invest in a health-care company backed by Russia-linked Columbus Nova, Jimenez responded that he would oversee the matter personally. Novartis said it didn’t make the investment. Still, the report calls into question Novartis’s attempts to distance itself from Cohen, who’s under federal investigation, and complicate new Chief Executive Officer Vas Narasimhan’s efforts to contain damage to the drugmaker’s reputation.
In a statement Friday, Novartis disagreed with the report’s conclusion that the company had issued a misleading statement about Cohen. Documents the company sent to the lawmakers show the company held one meeting with Cohen, determined he was unable to provide the needed services, and never asked him for anything else after March 2017. Contact with the company after that date was initiated by Cohen, Novartis said.
Mueller Probe Link
The latest findings follow revelations that Novartis paid $1.2 million to Cohen’s firm under a one-year agreement aimed at gaining insight into the administration’s health-care policy. Narasimhan has been grappling with fallout over the contract, which drew the pharmaceutical giant into Special Counsel Robert Mueller’s probe of suspected Russian meddling in the U.S. presidential election.
Narasimhan, who rose through the company’s ranks and moved into the top job earlier this year, is taking a number of steps to try to strengthen the company’s ethics and manage risk. Regaining trust is important for Novartis as the company seeks reimbursement for costly, cutting-edge medicines for cancer and other diseases and navigates the health-care market in the U.S., where high drug prices have come under fire.
Senator Ron Wyden, the ranking member on the finance committee, earlier this year asked Narasimhan to explain what Novartis was trying to achieve with its payments to Cohen’s firm, Essential Consultants LLC. At the time, Novartis was seeking approval and negotiating a payment deal with the U.S. government for a cancer drug called Kymriah that has a list price of $475,000, the senator said.
The relationship began with a late 2016 phone call to Cohen that Irwin Simon, founder of the Hain Celestial Group natural foods company, made while having dinner with Jimenez, the report said. Simon didn’t immediately respond to phone and email messages. The discussion between the Trump lawyer and then-Novartis executive continued early the next year, according to the report.
In February 2017, Cohen suggested that he could provide the company with information about how key Trump administration officials would approach health-care issues, and Jimenez opted to hire him.
Contract Not Terminated
The company said earlier this year that after a March 2017 meeting it quickly determined that the lawyer’s firm would be unable to provide the services it anticipated and decided to cut him off, but was contractually bound to keep making monthly payments of $100,000. The investigation found that the company could have terminated the contract with Cohen, yet “chose to continue” paying him.
Later, in June of last year, Jimenez sent Cohen an email outlining Novartis’s ideas to lower drug costs in the U.S. to bring to the Trump administration, and Cohen promised to provide feedback from an unnamed person linked to the administration, the probe found.
In August 2017, Cohen sent Jimenez information about an investment opportunity with Yamo Pharmaceuticals LLC, the company linked to Columbus Nova. Novartis executives had already looked at Yamo and declined to invest. Cohen urged Jimenez to reconsider, and the CEO said he would supervise the matter, according to the report.
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