Novartis Top Lawyer Resigns Over Cohen Payments, Calls Contract an 'Error'

Share

Novartis' top lawyer, Felix Ehrat, will retire at the beginning of next month, stepping down from his post on the pharma's executive committee over the controversial payment by Novartis of $1.2 million to a company controlled by President Donald Trump's personal lawyer Michael Cohen.

Novartis' general counsel Felix Ehart has announced that he will resign after revelations that he was a co-signatory on a controversial contract with U.S. president Donald Trump's personal lawyer Michael Cohen.

The company said that, after an initial meeting with Mr. 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.

"As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end", said Ehrat, who will officially leave June 1.

"With the recent change in administration, Novartis believed that Michael Cohen could advise the company as to how the Trump administration might approach certain United States healthcare policy matters, including the Affordable Care Act", Novartis stated.

Cohen came under investigation by federal prosecutors after arranging a $130,000 payment to adult-film actress Stormy Daniels, whose real name is Stephanie Clifford, to keep her from disclosing an alleged sexual relationship with Trump.

Ehrat will be replaced starting from June 1 by Shannon Thyme Klinger, who is now Novartis's ethics, risk and compliance officer. Novartis should have done more due diligence, he said.

But after Jimenez's people sat down with Cohen individually for the first time, "it was clear that he oversold his abilities", the former CEO said. It was part of efforts to learn more about how the Trump administration might approach USA healthcare, Novartis said. He said the company continued to pay him because it feared litigation over a premature termination of the agreement.

After the election, drug companies proactively sought to develop policy proposals amid a commitment to repeal and replace the Affordable Care Act, Jimenez said.

"That was a mistake", said Jimenez who admitted the firm should have "parted ways" with Cohen as soon as it became apparent he could not help. Jimenez said he never met Cohen in person. A trial for another US kickbacks case is scheduled for 2019.

Bloomberg separately reported that Novartis' new CEO Vas Narasimhan held a conference call with 5,000 managers to pass on the urgent message that the company needs to regain public trust and rethink the way it does business with consulting firms, lobbyists, and other groups.

Share