Novartis “insider”: We didn’t want to “anger” Cohen
This is an amazing story.
For background, on Tuesday, Stormy Daniels’s lawyer released information about a number of firms that had paid Michael Cohen, President Trump’s advisor. Payments were made to Essential Consultants, LLC, Cohen’s consulting arm. That information was later confirmed by reporting at the Washington Post and New York Times.
Among the organizations initially listed as having paid various amounts of money was Novartis, a large pharmaceutical company. AT&T and an organization reportedly with ties to a Russian oligarch were also mentioned.
Initially, Novartis was listed as having contributed $400,000. A statement from Novartis on Tuesday quickly distanced its current CEO from the news but didn’t challenge the veracity of the report. In fact it said it had no choice but to pay Cohen the full amount of the contract.
It was an odd response in that it appeared defensive and somewhat blame-casting. It also clarified that the amount Novartis paid Cohen was $1.2m, rather than $400,000.
As the contract unfortunately could only be terminated for cause, payments continued to be made until the contract expired by its own terms in February 2018.
The engagement of Essential Consultants predated Vas Narasimhan becoming Novartis CEO and he was in no way involved with this agreement. Contrary to recent media reports, this agreement was also in no way related to the group dinner Dr. Narasimhan had at the World Economic Forum in Davos with President Trump and 15 Europe based industry leaders. Suggestions to the contrary clearly misrepresent the facts and can only be intended to further personal or political agendas as to which Novartis should not be a part.
On Wednesday, STAT News reported the insight it had gained from an “insider” at Novartis about why the hat Novartis signed a contract with Michael Cohen for $1.2m. I assume this was a contract for $100,000 per month for twelve months. From the STAT story, a Novartis “insider” with direct knowledge said the firm was looking for access to the Trump administration.
With a new administration coming in, basically, all the traditional contacts disappeared and they were all new players. We were trying to find an inroad into the administration. Cohen promised access to not just Trump, but also the circle around him.
The reporting continues to say that it was clear at the first meeting that the health policy guidance that Cohen offered was not something that he could deliver on, but that Novartis was not going to make an effort to terminate the contract for fear of retribution.
At first, it all sounded impressive, but toward the end of the meeting, everyone realized this was a probably a slippery slope to engage him. So they decided not to really engage Cohen for any activities after that,” the employee continued. Rather than attempt to cancel the contract, the company allowed it to lapse early in 2018 and not run the risk of ticking off the president. “It might have caused anger,” this person said.
That one of the world’s largest pharmaceutical companies didn’t believe it was strategically wise to terminate a contract with Michael Cohen for non-performance, and that walking away from $1.2m was worth this problem going away is amazing.
Today, Novartis CEO Vasant Narasimhan said in an email to employees that there was little they could have done once the contract was signed but that it was clearly a mistake.
We made a mistake entering into this engagement and as a consequence are being criticized by a world that expects more from us,
If it was a mistake entering into this contract, it was also a mistake to stay in it once it was clear that Cohen couldn’t perform under the terms of the agreement. Based on this comment, it’s clear the current CEO is not taking responsibility for staying in the contract, placing blame on the former C-suite team rather than his.
Tomorrow, President Trump is scheduled to make a major policy speech on pharmaceutical pricing.