Senator, launching probe into Novartis' deal with Cohen, calls contract a 'corporate shakedown'

novartis
In an email to Novartis employees on Thursday, CEO Vas Narasimhan urged them to “remain resilient and keep your focus on serving patients” amid an outcry over its Michael Cohen contract. (Novartis)

If Novartis thought its public statements this week would be enough to silence questions about its $1.2 million contract with President Donald Trump’s personal lawyer, Michael Cohen, it was wrong.

The company now faces a congressional investigation into that contract, which it acknowledged Wednesday, and some very pointed questions about its genesis and its aims.

Sen. Ron Wyden, D-Ore., told CNN Thursday evening the Senate Finance Committee would launch a probe into what he called an apparent “corporate shakedown” that “raises the specter of corruption in the White House.”

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In a letter to CEO Vas Narasimhan, dated Friday, Wyden demanded the nitty-gritty on Novartis’ contract with Cohen, which the Swiss drugmaker characterized as an attempt to gain insight into the incoming Trump administration’s approach to healthcare policy.

Among them: Who, exactly, at Novartis arranged the deal and who made and approved each $100,000-per-month payment. Unnamed company officials told multiple news outlets Wednesday evening that former CEO Joe Jimenez had taken Cohen’s offer of assistance and instructed staffers to set up a deal. The company itself repeatedly emphasized that current CEO Vas Narasimhan, who took over Feb. 1, had nothing to do with it.

Wyden also wants to know—as do many pharma watchers—what, exactly, Novartis was buying with that $1.2 million. It’s an amount four times larger than what it paid any single lobbyist already on its roster, and Essential Consultants itself was not known for its healthcare expertise, as Wyden points out.

“I have rarely seen something like this that really in effect sounds like our government for sale,” Wyden told the network. “It’s a corporate shakedown.”

“The deal stinks and even the employees, many of them, seem outraged,” Wyden added.

In an email to employees on Thursday, Narasimhan said Novartis had “made a mistake” when it hired Cohen’s company and faced criticism because the world “expects more from us.” He maintained that he was “not involved with any aspect of this situation,” but “unfounded stories spread through the U.S. news” and “the facts did not matter.” And he urged employees to “remain resilient and keep your focus on serving patients.”

Wyden said his committee, which has jurisdiction over healthcare matters—including, he emphasized, drug companies—would be asking for those facts, and his Friday letter detailed the many facts he’s seeking.

“Please provide any contract and any statement of work between Novartis and Mr. Cohen, Essential Consultants, LLC, and/or any other entities owned, managed or controlled by Mr. Cohen or through which Mr. Cohen provided services,” Wyden’s letter states.

Novartis, as most pharma companies, had plenty to watch in Washington when it first hired Cohen. Drug prices persistently showed up on President Trump’s list of to-do items, and as president-elect, he famously lambasted the industry for “getting away with murder” with its pricing.

Novartis also had in the works an expensive, personalized, groundbreaking cell therapy, Kymriah, that promised to raise questions and suggestions for payment models unlike those for off-the-shelf drugs. As a drugmaker that had already been at the forefront of value-based pricing contracts—notably with its heart-failure drug Entresto—it knew the regulatory hurdles that made such contracts difficult to negotiate and enforce.

Hardly scandalous—and hardly unique to Novartis—those payment questions figured in Kite Pharma’s plans for launching its own drug Yescarta, a therapy in the same CAR-T class as Kymriah. Amgen, Sanofi, Regeneron and pharmacy benefits managers such as Express Scripts have all said FDA regulations aren’t friendly to creative payment methods.

But it’s Novartis in the spotlight for its approach to the new administration, and Wyden wants every detail of its interactions with Cohen, including internal emails, letters, text messages, instant messages, spreadsheets, and so on. Wyden also wants to know all about Novartis’ typical process for hiring consultants or lobbyists—from conception through approval to final contract.

And more to the point of Novartis’ access to Trump and his inner circle, Wyden wants all communications between the company and the administration, from the White House on down, that referenced Cohen and Co., or included information Cohen provided to the company.

Wyden gave Novartis until June 5 to respond, so the ball is now in the company’s court to provide information that can clear the air. In closing his email to employees Thursday, Narasimhan said “What defines us now is as how we respond to this difficult situation. … Together we will respond by continuing our work to profoundly impact human health.” He and the company now have other work to do, too.