long arm of scandal

Novartis counsel exits as drug firm distances itself from Trump lawyer

Let's face it, we all make mistakes. Source: Reuters

Swiss pharmaceutical giant Novartis moved to distance itself from its involvement with Donald Trump’s lawyer, Michael Cohen, announcing on Wednesday that its general counsel will be leaving the company at the end of the month.

The general counsel, Felix Ehrat, co-signed the $1.2 million contract along with former chief executive Joe Jimenez. He said the one-year consulting contract with Mr. Cohen was “an error.” Also on Wednesday, Mr. Jimenez told Bloomberg that the company quickly realized that Mr. Cohen had “oversold” his ability to help Novartis understand the new administration. The company decided to just let the contract expire rather than contest it in court, which in retrospect was a “mistake,” he said.

Novartis’ involvement in the scandal rocking Washington flared up last week as US senators asked for details about the drug company’s involvement with Mr. Cohen. Senator Ron Wyden, a Democrat from Oregon, noted the payments came just as Novartis was negotiating the reimbursement price for a new cancer treatment. Now Swiss authorities are also considering an investigation.

“The world rightly expects more from a leading healthcare company.”

Vas Narasimhan, CEO of Novartis

Vas Narasimhan, who took over as CEO in February, was upbeat about the Novartis product pipeline and the company’s future at a meeting with investors on Wednesday. But he acknowledged the scandal. “We also have made mistakes recently and the world rightly expects more from a leading healthcare company,” he said. He pledged that the new management team would display the “highest integrity” and “work hard to rebuild lasting trust with society.”

The Washington scandal reached as far as Basel because Mr. Trump’s personal lawyer evidently sought to cash in on his connection by signing up companies with his Essential Consultants firm. Some US companies, including AT&T, did sign on, though others, such as Uber and Ford, turned him down. Mr. Cohen’s activities are being investigated by Special Counsel Robert Mueller as well as by Congress.

Mr. Jimenez maintained that the Novartis contract was not for lobbying, however. The company simply sought advice about the key figures in the administration. Among other things, Mr. Cohen urged the company to build a factory in the United States – advice it did not follow. Novartis wanted to know how the administration would react to “certain proposals,” but that was precisely where Mr. Cohen “was not able to deliver.” The lawyer did not provide access to anyone in the administration, Mr. Jimenez told Bloomberg.

Michael Brächer is the Zurich correspondent for Handelsblatt. Darrell Delamaide is a writer and editor for Handelsblatt Global in Washington, DC. To contact the authors: braecher@handelsblatt.com and d.delamaide@extern.handelsblatt.com.

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