Dive Brief:
- Senate Finance Committee Ranking Member Ron Wyden, D-Ore., has launched an inquiry into Novartis' $1.2 million one-year business arrangement with Essential Consultants, the shell company linked with President Donald Trump's personal lawyer, Michael Cohen.
- Wyden wants Novartis to "provide details and supporting documents explaining their business arrangement," commenting that the deal happened at the same time that "the company was negotiating with Medicare on pricing for a drug that costs nearly half-a-million dollars to treat cancer."
- Cohen is under rising scrutiny over his role in making payments to buy the silence of Stephanie Clifford, better known as Stormy Daniels, over her alleged affair with President Trump.
Dive Insight:
After the news broke that Swiss pharma Novartis paid $100,000 per month into an account belonging to Cohen, in a fixed-term contract worth $1.2 million, the company issued a statement attempting to clarify the situation.
Novartis says the deal with Cohen's company, Essential Consultants, was to seek advice "as to how the Trump administration might approach certain U.S. healthcare policy matters, including the Affordable Care Act."
However, the initial meeting found Cohen unable to provide the sought-after services, but Novartis claims it was unable to terminate the contract, and had to pay through to its end in February 2018. The company also denied the deal had any link with Novartis CEO Vas Narasimhan attending a dinner at the World Economic Forum in Davos with President Trump and 15 Europe-based industry leaders.
Wyden is not content with that explanation.
In a letter to CEO Narasimhan, Wyden challenges the hiring of Cohen, pointing out that Cohen is not a lobbyist, and that Essential Consultants is not a healthcare policy consultancy; it is, according to its claims, a real estate consulting company. The letter also states that the contract with Cohen is worth more than the amount paid to any single lobbyist during the first 15 months of the Trump administration.
"Reports about Michael Cohen’s dealings with Novartis look more like a corporate shakedown than an honest business arrangement," said Wyden in a statement. "Novartis paid Mr. Cohen hundreds of thousands of dollars more than it paid its big-shot lobbyists in Washington. The American public needs to know who at the company signed off on this scheme and what were they expecting in return. Drug prices are already out of reach for too many American families, and drug companies need to be held accountable if they are breaking the law."
In a letter to Cohen, Wyden stated that "the size and timings of these payments, as well as the accusation that Novartis continued the payments because canceling the contract "might have caused anger" to the President, deserve closer examination.
Wyden has also contacted Ken Blanco, who directs the Financial Crimes Enforcement Network, requesting further information on transactions between Novartis and Essential Consultants, stating "the size and timing of these payments to Cohen, who has no apparent expertise in the healthcare industry, merit additional scrutiny."
The senator has requested copies of the contract and statement of work between Novartis and Cohen, Essential Consultants, and any other companies linked with Cohen. It also wants in-depth details of each payment, copies of contracts with any lobbyists, advisors or consultants that may relate to the Trump administration and healthcare. Further information requests include the internal approval process at Novartis, the rationale behind the deal, and copies of internal and external communications.