Novartis’ top lawyer is to retire from the company over payments made by the pharmaceutical giant to President Trump’s personal lawyer Michael Cohen, the Swiss drugmaker said Wednesday.
In a statement, Novartis said that Felix R. Ehrat, the group general counsel, would be replaced by Shannon Thyme Klinger, who is currently the company’s top ethics officer, at the beginning of June. Ehrat was stepping down “in the context of discussions surrounding Novartis’s former agreement with Essential Consultants, owned by Michael Cohen,” the pharmaceutical company said.
“Although the contract was legally in order, it was an error,” Ehrat said. “As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end.”
Ehrat, a practicing lawyer in Switzerland, has been the group general counsel at Novartis since 2011.
Novartis has said that former chief executive Joe Jimenez entered into the agreement with Cohen as part of an effort to gain insight into the approach the new administration would take on topics of interest to Novartis, particularly health care. The company said that, after an initial meeting with Cohen last March, it concluded that he did not have the expertise they had hoped for and decided not to go forward with the arrangement. But it said it learned the contract could only be canceled for cause and allowed it to expire in February.
Since revelations about the relationship May 8, Novartis has sought to distance new chief executive Vas Narasimhan from the controversy, saying that the decision to hire Cohen had been made by Jimenez and that Narasimhan had played no role. Jimenez retired from the company in January.
In a letter to employees last week, Narasimhan called the deal a “mistake” that led the company to be criticized “by a world that expects more from us.”
Jimenez has not responded to requests for comment.
Novartis has said that Robert Mueller, the special counsel investigating Russian interference in the 2016 presidential election, contacted them last November to inquire about the connection to Cohen, and that the company cooperated with the investigation and considers its role closed. Since last week, several Democratic senators, including Elizabeth Warren of Massachusetts, Richard Blumenthal of Connecticut, Ron Wyden of Oregon, and Patty Murray of Washington, sent Novartis letters demanding more information about the deal.
Telecommunications giant AT&T has also acknowledged paying Cohen $600,000 for a similar arrangement. AT&T has called the deal a “big mistake” and last week said its top Washington lobbyist would be leaving.
As a large drugmaker, Novartis had many reasons to want to seek favor with the federal government. Trump had vowed to repeal former president Barack Obama’s health care law and had also promised to get tough on rising drug prices, which had rattled the pharmaceutical industry.
It had several applications for new drugs before the Food and Drug Administration, including for a groundbreaking new cancer treatment, Kymriah, which was approved last year and for which the company has set a $475,000 price tag.
Novartis is also facing several federal inquiries into its conduct. The company has disclosed that it is under investigation for its marketing practices for several products, including for the multiple sclerosis drug Gilenya, and that it has been subpoenaed in several industrywide investigations, including one looking into price-fixing among generic drugmakers and another investigating the role of companies’ contributions to charitable groups that provide financial assistance to patients who use Novartis products.