Novartis struck up a firestorm Wednesday with the revelation it paid President Donald Trump's lawyer Michael Cohen $1.2 million to do essentially nothing. The company said it entered a consulting deal with Cohen shortly after Trump's ascendance as president to gain insight about the new administration's approach to healthcare, but after one meeting, it determined he couldn't help.
Even still, the drugmaker continued to pay Cohen $100,000 a month through February 2018. The reason, according to Novartis, is that the contract could only be terminated for cause.
Later, in a series of interviews, unnamed Novartis officials told multiple media outlets that Cohen had approached former Novartis CEO Joe Jimenez offering access to the president, and that Jimenez authorized the deal.
The company has gone to great lengths to stress its new CEO Vas Narasimhan wasn't at all involved. The payments weren't at all related to Narasimhan's January audience with Trump at Davos, at a dinner attended by more than a dozen other European CEOs, Novartis said.
Novartis' accounts—official and anonymous—and Cohen's own comments leave plenty of unanswered questions.
About the first contact
1. Who initiated the talk?
"Multiple people familiar with Cohen's conduct following the election" told CNN that Cohen has been pitching himself around to potential clients, and multiple reports from sources inside Novartis said it was Cohen who did the legwork in striking up a relationship with the Swiss drugmaker. Novartis hasn't yet confirmed this, however, and it didn't respond to requests for more information by press time.
2. Anyone else?
If Cohen did solicit Novartis as a client, did he reach out to—or sign—other biopharma companies?
3. What did Novartis itself want from Cohen?
There are multiple reasons why a multinational drugmaker like Novartis might want counsel on "U.S. healthcare policy matters" as a new administration took over. But Cohen is a lawyer, not a healthcare policy expert. What could he offer that qualified experts couldn't, besides access to Trump?
4. Did Novartis do any homework on Cohen?
Novartis does due diligence on its deals. Did it do any due diligence on Cohen? Did anyone at the company actually meet with Cohen before agreeing to spend $1.2 million? How were the terms determined?
About the execution of the contract
5. Did Cohen fail to provide access?
According to Novartis, it struck the contract with Cohen last February. Unofficially, the word is that former CEO Jimenez took Cohen up on an offer of a conduit to Trump's administration. But officially, Novartis said it decided after a first meeting with Cohen in March that the Trump lawyer couldn’t deliver.
6. Why follow through?
Novartis said it found out Cohen "would be unable to provide the services Novartis had anticipated," but instead of holding Cohen accountable, Novartis continued paying Essential Consultants through the life of the contract, which expired in February 2018. "The contract could only be terminated for cause," the company said, but if inability to perform doesn't count as cause, what did? Novartis didn't comment when we asked.
7. Who met with Cohen?
Who from Novartis attended that March meeting with Cohen, and how did the Novartis contingent conclude Cohen's services weren't sufficient?
8. Who's responsible at Novartis?
The Novartis officials who spoke anonymously to a variety of media outlets all said Jimenez authorized the deal. Did he? So far, no one has been able to reach him directly for an answer, and Novartis isn't saying. But Jimenez didn't work with Cohen alone; according to one Novartis source, he directed staffers to make the deal happen. Who were they?
9. Let's say Narasimhan wasn't involved in the Cohen contract. Did he know about it?
Novartis used a very affirmative tone to clear Narasimhan, stressing that "he was in no way involved with this agreement." Narasimhan has been with the company for some time, though his previous job as global head of drug development and CMO falls on the scientific side. Was he briefed about it before taking the CEO chair?