U.S. Senator Demands Novartis Disclose More Information About $1.2 Million Paid to Trump Attorney

Novartis may believe that it has fully disclosed all pertinent information related to $1.2 million paid to President Donald Trump’s attorney for consulting work, but members of the U.S. Senate are not done with the Swiss pharma giant.

Sen. Ron Wyden, an Oregon Democrat and ranking member of the Senate Finance Committee, believes more needs to be disclosed. Late Friday, following revelations of the payments to Michael Cohen and his Essential Consultants firm, Wyden issued a statement demanding answers.

Last week Novartis admitted to the $1.2 million payment to Cohen. The Swiss company said it entered into a deal with Cohen in February 2017 for one-year of consulting work at $100,000 per month. The company said it believed Cohen, a longtime associate of Trump, could advise the company on how the Trump administration could approach health care policy matters, including the Affordable Care Act. However, Novartis said after the first meeting with Cohen it determined that the Trump attorney would be “unable to provide the services that Novartis had anticipated related to U.S. healthcare policy matters.”

“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 a statement.

Wyden was critical of the Novartis claims. Wyden said that the $1.2 million provided to Cohen, a close associate of the president, was far more than it paid federal lobbyists in Washington, D.C. Wyden pointed out that during the one-year contract Novartis had signed with Cohen and Essential, the company was “negotiating with Medicare on pricing for a drug that costs nearly half-a-million dollars to treat cancer” – its CAR-T drug Kymriah, which was approved last summer. In a letter to Novartis Wyden noted that federal data showed Novartis spent $2.5 million with federal lobbyists but paid the $1.2 million to Trump’s personal attorney.

In the letter addressed to Novartis CEO Vas Narasimhan, Wyden pointed out that Cohen is not a registered lobbyist and his company, Essential Consultants, was registered as a real estate consulting company – not a healthcare consulting company.  

Additionally, Wyden noted that the payments were being made to Cohen while the company was forging ahead for its breakthrough regulatory approval of the CAR-T treatment Kymriah, the first of its kind approved in the United States.

The Senate committee has jurisdiction over federal health programs, including Medicare and Medicaid. Wyden said Novartis receives a significant amount of revenue, $16.9 billion in 2017, for its medications from these publically funded programs. Some of the Novartis drugs that generate big returns through these programs include three cancer drugs, Gleevec, Sandostatin and Afinitor. In 2015 the federal government spent $2 billion for those medications, Wyden said.

The payment to Cohen raises the specter of pay-to-play schemes that have dogged Novartis in multiple countries, including the United States. In the U.S. Novartis is facing an investigation over allegations that the company hosted about 80,000 “sham” events in which the government maintains the drug company “wined and dined” doctors to prescribe the company’s cardiovascular drugs. Throughout much of last year, there were allegations that company employees bribed physicians and other public officials in Greece to boost prescriptions and company sales.

It’s those concerns that have likely fueled Wyden’s actions. In his letter to Novartis, Wyden called on the company to provide information as to who set up the payments to Cohen, the internal approval process for the contract with Cohen and what the company hoped to gain from its engagement with the Trump attorney.

“The American public needs to know who at the company signed off on this scheme and what were they expecting in return. Drug prices are already out of reach for too many American families, and drug companies need to be held accountable if they are breaking the law,” Wyden said in a statement.