Novartis Nabs Siemens Veteran As Its New Head of Ethics in Wake of Ethics Scandals

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As Novartis wrangles with the fallout from its association with Michael Cohen and the fees it paid his consulting company for access to the administration of President Donald Trump, the Swiss pharma giant has brought on a new chief ethics officer.

This morning, the company named Siemens veteran Klaus Moosmayer for the role of Chief Ethics, Risk and Compliance Officer. Moosmayer succeeds Shannon Thyme Klinger who was recently appointed to the role of group general counsel after Felix R. Ehrat resigned following revelations about the Cohen deal. Moosmayer joins Novartis on Dec. 1 and will report directly to Chief Executive Officer Vas Narasimhan.

In its announcement, Novartis called Moosmayer a “recognized global leader in ethics and compliance.” His resume includes holding the role of chairman of the Anti-Corruption Taskforce of the Business and Industry Advisory Committee at the Organization for Economic Co-operation and Development (OECD). Additionally, he holds the role of vice chairman of business compliance for the current G20 presidency. Since 2014, Moosmayer has served as chief compliance officer at Siemens.

Novartis first created the role of chief ethics and compliance officer in 2014, the company said. Narasimhan said the company must hold itself to the “highest ethical standards” and aim to “maintain the trust of society and our many stakeholders.” Narasimhan said Moosmayer will play a significant part of his executive leadership team as the company further defines its “approach to ethics, risk and compliance in the coming years."

That will be key for Novartis as it attempts to move away from the shadow of past scandals, including the $1.2 million it paid to Cohen. The relationship to Cohen dates back to previous Novartis CEO Joe Jimenez. In May it was revealed that Novartis paid Cohen, who was known as Trump’s “fixer,” $1.2 million for consulting services. The company entered into a deal with Cohen in February 2017 for one year of consulting work – what has largely been viewed as an unsanctioned lobbying deal. In July a U.S. Senate report said that Novartis hired Cohen to provide it with access to key policymakers in the Trump administration. The Swiss pharma giant provided Cohen with drug pricing recommendations for “discussion with… Trump administration,” the report said.

Novartis has called the relationship with Cohen a mistake and also disputed the Senate report.

That relationship with Cohen isn’t the only ethical pall over Novartis. The company has also faced a number of bribery scandals in recent years. In 2017, the company faced allegations it bribed physicians and other public officials to boost prescriptions and company sales in Greece. In August 2016, Novartis executives in South Korea were indicted for allegedly making $2 million in payments to physicians in exchange for prescribing Novartis medications. Similar allegations were made in 2016 by a whistleblower in Turkey. In November 2015, Novartis agreed to pay $390 million to settle a civil lawsuit related to the kickback payments to specialty pharmacy companies that distributed the drugs Exjade and Myfortic.

Moosmayer said he is excited about his opportunity at Novartis.

“Society has high expectations of the pharmaceutical industry and rightfully so. I am pleased to see that there is already a strong focus on driving personal accountability for behaviors, and generating learnings that can be applied across the organization within Novartis,” Moosmayer said in a statement.

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