I
n an unexpected twist, Novartis has gotten caught up in the messy investigation into Michael Cohen, President Trump’s personal attorney.
The drug maker confirmed it entered into a previously undisclosed agreement last year with Essential Consultants, which is reportedly a shell company that Cohen used to make payments for various matters.
A Novartis unit called Novartis Investment SARL made four payments, each one totaling $99,980, to the consulting firm, according to documents released by Michael Avenatti, the lawyer for Stormy Daniels, the adult film star whose real name is Stephanie Clifford and who was paid $130,000 by Essential Consultants to keep quiet about her alleged affair with Trump.
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In a statement sent to us, Novartis says it entered into a one-year agreement with Essential Consultants in February 2017, “shortly after the election of President Trump focused on U.S. healthcare policy matters. The terms were consistent with the market. The agreement expired in February 2018.”
The first Novartis payment was purportedly made on Oct. 5, 2017, while the subsequent payments followed in successive months — Nov. 3, 2017, Dec. 1, 2017, and Jan. 5, 2018, according to the documents.
A Novartis spokesman said that “any contracts were done prior to (chief executive officer Vasant Narasimhan) taking over” and that he “had no involvement whatsoever with this arrangement.” He did not provide any further details concerning the payments, but indicated the agreement had expired.
Narasimhan succeeded Joe Jimenez as Novartis chief executive on Feb. 1 this year, although he attended a dinner with Trump at the World Economic Forum in Davos, Switzerland, on Jan. 25, which Avenatti noted in the documents that he released. A Novartis spokesman later added that Jimenez last met with Trump at a meeting with executives from several drug makers last spring.
The drug maker said Wednesday it had been contacted in November 2017 by lawyers from Special Counsel Robert Mueller’s office regarding the 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.”
Novartis said in its statement that it entered into a one-year agreement with Essential Consultants in February 2017, “shortly after the election of President Trump focused on U.S. healthcare policy matters. The terms were consistent with the market. The agreement expired in February 2018,” The company emphasized that current chief executive officer Vasant Narasimhan “had no involvement whatsoever with this arrangement.”
Novartis is based in Basel, Switzerland, but has major research operations in the United States and needs approval from the Food and Drug Administration for its drugs to be sold in the U.S. It spend nearly $8.8 million lobbying the U.S. government last year, according to the Center for Responsive Politics OpenSecrets database.
Throughout much of last year, Novartis was embroiled in a bribery scandal in Greece, where the government was probing allegations that the drug maker made payments to numerous politicians to boost sales of its medicines through public agencies.
In February 2018, the Athens public prosecutor’s office reportedly asked the U.S. Justice Department to assist its investigation. Although the Greek parliament effectively ended the probe recently, the episode caused Novartis substantial negative publicity much of last year. There is no evidence at this point, however, that these events were connected to the payments made to Essential Consultants.
In the U.S., the drug maker is defending a long-running lawsuit that is being pressed by the federal government over allegations it provided doctors with paid speaking engagements, fancy meals, and alcohol in exchange for writing prescriptions for its drugs.
The case is being closely watched because the company has been accused of being a repeat offender. How so? In 2010, Novartis paid $422.5 million in penalties and pleaded guilty to a misdemeanor to resolve criminal allegations that it improperly promoted several medicines.
At the time, the company was already operating under a Corporate Integrity Agreement, which required establishing an internal compliance program and reporting violations, among other things. That agreement was signed in September 2010, yet the lawsuit alleged the infractions occurred afterward, suggesting Novartis might face a stiff penalty should it attempt a settlement with the government.
This story has been updated with a statement from Novartis on its cooperation with Special Counsel Robert Mueller’s office.
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How can $20 USD make a difference to a company like Novartis? (Of course, if you have ever filled out an expense form for one of the mega-pharma’s, you know it does … but I digress.)
The exact figure mentioned for the 4 payments is fascinating – “each one totaling $99,980” – just $20 less than …..
Our scribe can be forgiven for rounding the total to $400K USD because after all, with that much money, a difference of $80 USD is ‘just a rounding error’ (Or valid by ‘the rule of 5’s’) – except, of course, that it was no error at all but absolutely intentional!
Also, with Novartis, this one occurred in 2010: https://sanfordheisler.com/case/novartis-pharmaceutical-gender-discrimination-class-action/
Trump was right:
drug companies really do go away with mur …ehm … paying of porn stars!
That actually explains why Trump for once repaid his lawyer!
YOU’RE TELLING US A DRUG COMPANY PAID AN ATTORNEY FOR HIS SERVICES? I’M APALLED!
of course the $99,980 question is, what services? As far as I can tell, Cohen seems to provide a limited range of those.
Then they would have paid him directly, not a shell company for an amount brought down by $20 to avoid triggers if he was their lawyer.
April, “May” I Observe that your point is well taken?