he relationship between President Trump’s personal attorney, Michael Cohen, and Novartis was more extensive than the drug maker previously disclosed, and the company issued misleading statements about the relationship, according to a report issued by Senate Democrats on Friday.
Dozens of emails and other documents revealed that the agreement between Cohen and Novartis was longer and more detailed than had been previously stated. Moreover, Novartis explicitly sought to hire Cohen to gain access to “key policymakers” and provided him with ideas for lowering drug costs, which later appeared in the Trump administration blueprint that was developed to address the issue.
With the findings, the report highlights a sensational series of events that have underscored concerns about the extent to which the pharmaceutical industry has attempted to influence the Trump administration. And the conclusions place Novartis in a very unflattering light, as the documents indicate the company saw the arrangement as a golden opportunity to buy access to the White House.
The existence of the agreement between the drug maker and Cohen, whose consulting firm was paid $1.2 million from early 2017 through early 2018, first became known two months ago. At the time, Novartis portrayed the arrangement as a brief interaction between the Trump attorney and former Novartis chief executive Joe Jimenez as a chance to find a pipeline to the new administration.
After the agreement became known, the company attempted to downplay the deal by maintaining its staff subsequently believed that Cohen was unlikely to deliver on providing sufficient access after a single meeting in March 2017. But the documents indicate that, in fact, Cohen and Jimenez continued to have “multiple” conversations over the following six months.
Those communications included discussions on what the report described as “substantive issues,” such as the administration proposal on drug pricing; a potential Novartis investment in a small drug maker called Yamo that was backed by a private equity firm tied to sanctioned Russian billionaire Viktor Vekselberg; and opioid lawsuits.
Read the documents here.
In a statement, the company said it “disagree[s] with the report’s conclusion that we issued a misleading public statement regarding the extent of our engagement with Mr. Cohen. As the documents we produced show, Novartis had [only one] meeting with Mr. Cohen on March 1, 2017 and then concluded he was not able to provide the substantive consulting advice and insight for which he was hired. We never asked Mr. Cohen to perform any services on our behalf after March 1, nor did he perform any.
“The only additional communication we had beyond the March 1 meeting was when Mr. Cohen initiated contact with … Mr. Jimenez, on a handful of occasions. On one of these occasions, Mr. Cohen asked Mr. Jimenez for ideas on how to lower drug prices. In response, Mr. Jimenez provided him with a list of well-known ideas for lowering the cost of pharmaceuticals that had been discussed publicly in the industry.”
Jimenez sent this list to Cohen in June 2017 after Cohen told the CEO in a phone call that “a friend with experience in the pharmaceutical industry was putting together ideas on how to lower drug prices for discussion with persons in the Trump Administration,” according to a June 18 letter Novartis sent to lawmakers.
After Jimenez sent the ideas, Cohen replied: “Received and I will forward to you their suggestions.”
Novartis said in its June 18 letter that the company could not find any records of suggestions received.
This was around the time that the administration was working on an executive order on drug pricing. A draft of the order leaked in June, but no order was ever signed. Novartis said in its letter that Jimenez had an unrelated meeting with administration officials in May 2017 to discuss drug prices.
Those six points included promoting value- and outcomes-based contracting for drug reimbursement; requiring insurers and pharmacy benefit managers to provide point-of-sale rebates to reduce cost-sharing; removing the prohibition in Medicare Part D to allow drug makers to provide financial assistance to beneficiaries; providing regulatory relief to the Food and Drug Administration approval process; providing regulatory and financial incentives to accelerate generic drug approvals; and pursuing trade deal that protect drug makers.
“The FDA has significantly increased regulation that extends the time and cost associated with developing a new drug,” the document read. “Finding regulatory relief that ensure the United States is still the world leader in innovation and delivering safe treatments to patients is critical.”
The document also suggested some policies to foster the development of generic drugs, including “tax credits, waiving application fees, creating priority review vouchers for future applications, creating new exclusivity periods for first generic competitors and providing FDA technical assistance.”
The reference to value and outcomes-based contracting is significant, because Novartis was seeking regulatory approval for a breakthrough cancer treatment that was soon to be priced at $475,000 for a single, potentially life-altering dose. And the company was pursuing such contracting – one variation is called pay-for-performance – in hopes of convincing federal officials to strike such a deal, although the Centers for Medicare and Medicaid eventually passed.
The report was prepared by the staff of Sens. Ron Wyden (D-Ore.), Patty Murray (D-Wash.), Elizabeth Warren (D-Mass.), and Richard Blumenthal (D-Conn.), and released Friday by the Senate Finance Committee.
“The more we learn about the arrangement between Michael Cohen and Novartis, the more alarming it appears. The public was rightly concerned to learn President Trump’s close associates are selling access to the Administration and getting million dollar contracts from drug companies,” Murray said in a statement.
In addition to revealing new correspondence between Jimenez and Cohen, the report also names other Novartis individuals who were involved in the arrangement.
Barry Rosenfeld, the U.S.-based vice president and general counsel of Novartis Finance Corporation, worked along with Novartis general counsel Felix Ehrat to negotiate the contract with Cohen. Ehrat resigned in May of this year, after the situation came to light.
U.S. country president Tom Kendris as well as head of U.S. government affairs Dan Casserly attended the single meeting between Novartis and Cohen, which took place in March 2017. Ehrat also attended this meeting.
Casserly, Kendris, and Rosenfeld are still employed by Novartis, a spokesperson said.
“Each of these individuals did exactly what the company would expect anyone to do in such a situation,” the spokesperson said. “Mr. Rosenfeld worked to include language in the contract ensuring full compliance with all applicable laws and Novartis policies, and Mr. Kendris and Mr. Casserly spoke up clearly to senior management and left no doubt as to their views collectively and as individuals that Novartis should not use Mr. Cohen going forward.”
Novartis, in its June 18 letter, also noted that it never invested in Yamo after receiving emails from Cohen about investing in the company in August 2017.
Cohen’s lawyer, in a letter to Wyden released by the Finance Committee, said Cohen hadn’t registered as a lobbyist for Novartis because he was not legally required to do so. “His duty was advice, not lobbying,” Washington lawyer Stephen M. Ryan wrote in the May 31 letter. He added that the committee is “relying upon illegally disclosed information that became the basis of press reports” and that its members have “little basis … to make these inquiries about Mr. Cohen’s lawful conduct.”
This story has been updated with comments from Sen. Patty Murray and Michael Cohen’s lawyer.