The top lawyer at pharmaceutical company Novartis has announced that he’s leaving the company today. The departure of General Counsel Felix Ehrat comes in the wake of news that Novartis had given $1.2 million to a secret shell company controlled by President Trump’s personal lawyer and “fixer,” Michael Cohen. Novartis claims it got nothing in return for the money.
“Although the contract was legally in order, it was an error,” the 60-year-old Ehrat said 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.”
That former CEO, Joe Jimenez, had led the Swiss-based drug company since 2007 but retired on February 1st to “return to Silicon Valley.” Jimenez met with President Trump not long after his inauguration in January of 2017.
The payments to Cohen’s shell company, Essential Consultants LLC, started in February of 2017 and were made monthly in $100,000 increments. Novartis said that Cohen was paid for insights into, “how the Trump administration might approach certain U.S. healthcare policy matters.” But the company says that the payments ceased in March of 2018 after Cohen provided nothing. Essential Consultants was created in October of 2016, shortly before the presidential election, and was the company that paid porn actress Stormy Daniels $130,000 in hush money about an affair she allegedly had with the president back in 2006.
Novartis has been accused of paying bribes to public officials and health care providers all over the world in recent years. The company has paid millions of dollars fines in South Korea and China since 2016, while a bribery investigation in Turkey was opened but quickly closed down in 2016. A new investigation into bribes in Greece was opened this past February.
“We also have made mistakes recently and the world rightly expects more from a leading healthcare company,” the new CEO of Novartis, Vas Narasimhan, said in a statement. “Our new executive team and I have a deep commitment to ensure we always operate with the highest integrity and sound judgment and will work hard to rebuild lasting trust with society.”
Back in 2016, the old CEO Jimenez was expecting strict new drug pricing regulations in the U.S. no matter which presidential candidate won. But despite President Trump’s tough talk on drug prices, his latest proposals will do nothing to bring down the price of drugs. Trump campaigned on the idea that Medicare should be able to negotiate with the drug companies for better prices, something that he no longer supports, instead favoring the abstract notion of “more competition” in the marketplace. Trump also campaigned on the idea of allowing people to import cheaper drugs from other wealthy nations like Canada where drug prices are regulated. Again, Trump has completely gone back on that promise.
“The only way that direct negotiation could possibly save money is by doing something this administration doesn’t believe in: denying access to certain medicines for all Medicare beneficiaries through rationing, or setting prices for drugs by government fiat,” Trump’s secretary of health and human services, Alex M. Azar II, told the New York Times this week.
“We don’t believe either of these proposals would put American patients first. They would move us toward the kind of socialized medicine systems that have such a notorious reputation for poor quality and access.”
Did Novartis get more for their money than they’re letting on? We might find out, as Democrats are calling for companies that paid Cohen, including AT&T, to come forward with more documents about why they were essentially just handing cash directly to the president’s personal lawyer.