Novartis' tone-deaf response to Michael Cohen: troubling, but not surprising

Discussion in 'Novartis' started by anonymous, May 14, 2018 at 7:43 AM.

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  1. anonymous

    anonymous Guest

    https://www.statnews.com/pharmalot/2018/05/14/trump-michael-cohen-novartis/


    STAT News

    By Ed Silverman / Pharmalot

    When Donald Trump’s lawyer, Michael Cohen, approached Novartis early last year to provide access to the new Trump administration, the company’s response was tone-deaf. But it was hardly a surprise.

    The personal lawyer and “fixer” for the president came knocking as big drug makers were anxious about the future, since candidate Trump had lambasted them for through-the-roof prices. So former Novartis chief executive Joe Jimenez quickly authorized a one-year, $1.2 million deal. This was considerably more than Novartis typically paid Washington lobbyists. And it wasn’t for Cohen’s policy expertise — he knew nothing about health care.

    Even so, the entreaty from Cohen was too good to pass up. Why reject a direct pipeline to someone who has Trump’s ear?

    Yet the apparent lack of due diligence by Novartis underscores a disturbing pattern in which the company has repeatedly run into trouble by haphazardly tossing around money to win friends and boost business.

    Consider the sorry trail over the past several years:

    Last year, Novartis paid a $49 million fine in South Korea for bribing doctors to recommend its drugs. And a scandal erupted in Greece, where prosecutors investigated alleged bribes to public officials. In 2016, Novartis paid $25 million to settle charges that the company violated the U.S. Foreign Corrupt Practices Act by making illegal payments to health care providers in China. Bribes were allegedin Turkey, too.

    In the U.S., Novartis faces a trial next year for allegedly running afoul of kickback laws by holding thousands of “sham” events to entice doctors to prescribe its medicines. Three years ago, the company reached a $390 million settlement with authorities for inducing specialty pharmacies to boost prescriptions. In 2010, Novartis struck a $422 million settlement, partly for paying kickbacks to doctors.

    Even with that record, Novartis is hardly the only drug maker to get tagged for such behavior. In fact, the company’s actions reflect an unfortunate and cavalier “cost-of-doing-business” attitude that has permeated the pharmaceutical industry at large. And while the Cohen contract came under scrutiny by Special Counsel Robert Mueller, there is no indication — so far — that anything illegal occurred, even if the deal with Cohen was an old-fashioned, “pay-to-play” arrangement.

    Nonetheless, Jimenez should have known better.

    Consider this from a former chief lawyer at another large drug maker, who asked not to be named:

    “I would have totally advised not entering into this agreement, even if Cohen knew something of substance” about health care, this individual told me. “The appearance of impropriety here is so great that it stinks to high heaven and fails the smell test to anybody with a functioning nose. What reasonable lawyer or business person could possibly fail to see that? … Were something like this to become public, as one would have to assume it would, the negative publicity would be a killer in its own right.”

    Jimenez, for his part, has not responded to my requests for an interview.

    There is speculation, though, that Jimenez was concerned with more than just high drug prices or getting on Trump’s good side.

    In announcing a probe into the company Friday, Sen. Ron Wyden (D-Ore.) suggested that the contract may have been linked to a groundbreaking — and very pricey — cancer treatment that was due to be reviewed last year by the Food and Drug Administration. He also noted that Novartis subsequently held talks with the Centers for Medicare and Medicaid Services about a unique reimbursement deal for the medication.

    This is a reasonable thought, but unlikely to tell the whole story. In fact, Novartis increased its overall lobbying spending in Congress last year to $8.8 million, up from $7 million in 2016. The same pattern occurred in the European Union, where Novartis spent about $2.7 million in 2017, up from approximately $2.1 million the year before on a wide range of issues.

    Why Cohen specifically sought out Novartis is unclear.

    Spokespeople for other large drug makers — GlaxoSmithKline, Roche, AstraZeneca, Pfizer, and Johnson & Johnson — tell me that Cohen did not approach their companies. Spokespeople for Merck, Eli Lilly, and Bristol-Myers Squibb did not respond when asked whether Cohen made any overtures. Cohen could not be reached for comment, and his attorneys did not reply to me.

    Meanwhile, Jimenez’s successor, Vasant Narasimhan, who became chief executive this past February after running R&D operations at the company, has tried hard to distance himself. In an email to Novartis employees, he wrote that he was not involved with the contract. An official statement had the same message. And though Narasimhan was approached by Cohen, he let the one-year contract lapse.

    Even if we take the new CEO at his word and give him credit for doing the right thing, it comes too late.

    Novartis has a troubled past that can’t be erased with one gesture. And the payments to Cohen only reinforce perceptions that drug makers are all too willing to play sordid angles to achieve their goals.

    By hiring Cohen, Novartis hoped the fix was in. Instead, all we have is more evidence of a broken system.
     

  2. Anonymous

    Anonymous Guest

    The root cause of Compliance in Novartis is its so called Performance driven culture or how this culture is perceived today. It works when when the leadership is objective, intelligent, appreciates speak-up, promotes diversity of thought, rewards leaders who would do the right thing, no matter what the price and follow the much touted Values and Behaviours. Unfortunately, in the Jimenez era, this degenerated to a simplistic "ketchup like" definition of Performance: Achieve business KPIs and suck up to your Manager. What we see is the result of this blatant disregard for what's right as long as it's perceived right.

    Legal and Finance have always been the conscience keepers of Novartis but somewhere along the line, this degenerated to unethical fellas who filled the pool with their Yes Men! Vaas, time for action and using some old fashioned common sense. Sack the current finance and legal leadership, get new folks from outside with a mandate to reboot this swamp. You have also reached where you have more by sucking up and less by truly deserving that position, but here's a chance to earn the title.

    There are many more scandals waiting to erupt, Act before Novartis goes the Enron way.
     
  3. anonymous

    anonymous Guest

    Yes, Vas, show true courage by removing the unethical leaders and start your era as the tipping point away from the forgettable past.
     
  4. anonymous

    anonymous Guest

    So glad I left a few years ago and can’t be associated with this sleazy organization! What an embarrassment to have to speak to customers about.
     
  5. anonymous

    anonymous Guest

    You hit the nail on the head. Reboot!
    Suck up culture permeates throughout the organization.

    I left a few years ago and happy that I did.


     
  6. anonymous

    anonymous Guest

    The bottom line is that the people involved should all be fired. Government Affairs should have known this was questionable. They should either be fired for being stupid or not having the backbone to tell people this was a bad idea. Either way, this has stained the company name. AT&T apparently fired its top lobbyist for the deal with Cohen. Vas needs to step up and take visible, decisive action.
     
  7. anonymous

    anonymous Guest

    What if Vasshole was in on it or even suggested it? Will he resign?? o_O
     
  8. anonymous

    anonymous Guest

    Wait a sec...we have two different interpretations of the Cohen arrangements.
    If AT&T considers this a lobbying contract, why does Novartis say it is for "consulting"?
     
  9. anonymous

    anonymous Guest

    AT&T does not have pending whistleblower lawsuits
     
  10. anonymous

    anonymous Guest

    Does it even matter? The company can shift the blame to Joe who is under NDA and whose exit package has a clawback provision.

    The real story is that the "mistake" was the public exposure of NVS' shady deal with Cohen.

    Now, the Board's and Vas' hands are forced to respond with some semblance of real actions.
     
  11. anonymous

    anonymous Guest

    Touche!

    Just as it was a business decision then to not terminate the Cohen deal for failure to deliver, it's a business decision now to classify it as a consulting engagement.

    That story would be consistent with why the company didn't report it as lobbying expense, as required by law.

    The only risk here is what the SDNY does, if they still have any balls left without Bharara, in offering Cohen something in return for any information that would contradict NVS' public statements on the matter.

    I'm sure Trump would consider a much better deal to get a couple billions in settlement out of NVS instead of the insignificant million that Cohen managed to extort! MAGA!
     
  12. anonymous

    anonymous Guest

    Happy now?