Novartis CEO Vas Narasimhan has repeatedly distanced himself from the dubious $1.2 million in payments the company made to President Donald Trump’s former personal lawyer Michael Cohen as the new administration got rolling. Looking at the scandal in the rearview mirror Thursday, the chief executive recalled the moment he heard the news.
Speaking at the Forbes Healthcare Summit in New York, Narasimhan said he was “completely blindsided” by news of the contract, as quoted by Business Insider. He also got a call from his mother, who asked whether he’d seen CNN’s report about the bombshell news, he told the Forbes audience.
When part of the $1.2 million payment was first outed by Stormy Daniels’ lawyer in May, Narasimhan had just taken the reins at the Swiss drugmaker three months before. “I was not mentally prepared,” he said.
As Novartis unveiled the one-year consulting contract with Cohen in its first official response, it immediately cleared Narasimhan, saying “he was in no way involved with this agreement.” But observers still speculated that he had known about the deal as global head of drug development and chief medical officer, or learned of it when ex-CEO Joe Jimenez handed him the baton.
In a message sent to employees after the exposé, Narasimhan admitted the engagement with Cohen was a mistake. “While I was not involved with any aspect of this situation, the facts did not matter. I went to sleep frustrated and tired,” he wrote.
Later, former CEO Jimenez and ex-general counsel Felix Ehrat came forward admitting their roles in signing the notorious contract that got Novartis into the PR crisis.
The fact that Novartis has faced several alleged bribery and ethics violations around the world in recent years got Narasimhan to work. He had already vaulted his chief ethics officer onto the executive committee before the Cohen deal revelation. After Ehrat took “personal responsibility” for the deal and retired, Narasimhan replaced him with Shannon Thyme Klinger, whose chief ethics, risk and compliance officer role will be officially taken over by former Siemens compliance overseer Klaus Moosmayer on Saturday.
Besides advancing drug R&D, Narasimhan has pegged rebuilding trust and reputation one of his five top priorities for the company. “I never want Novartis to achieve our financial performance or objectives because we compromised on our ethical standards or our values—we must always choose our values,” Narasimhan recently told investors.