Updated 5/9 to include new information about Novartis’ payments to Essential Consultants.
Novartis (NYSE:NVS) found itself in the middle of a national scandal today after it was revealed that the drugmaker paid more than $1 million to a consulting firm linked to President Donald Trump’s personal attorney, Michael Cohen.
The shell company, Essential Consultants, was used by Cohen to pay $130,000 to Stormy Daniels, an adult film actress, to silence her regarding allegations of an affair with the president.
The payments were first made public by Daniels’ attorney, Michael Avenatti, who found that Novartis made four $99,980 payments to the firm.
At first, Novartis said it inked a one-year deal with the firm in Feb. 2017 and that the arrangement was designed to focus on “healthcare policy matters.” Later, however, the pharmaceutical company clarified that it paid nearly $100,000 per month for the entire duration of the deal to gain Cohen’s insight on how to navigate the Trump administration’s approach to healthcare policy, bringing the total to more than $1 million.
Novartis quickly realized that Cohen could not give them the insight they were hoping for, according to a report from CNBC.
“As the contract, unfortunately, could only be terminated for cause, payments continued to be made until the contract expired by its own terms in February 2018,” Novartis explained.
“The engagement of Essential Consultants predated Vas Narasimhan becoming Novartis CEO and he was in no way involved with this agreement. Contrary to recent media reports, this agreement was also in no way related to the group dinner Dr. Narasimhan had at the World Economic Forum in Davos with President Trump and 15 Europe based industry leaders. Suggestions to the contrary clearly misrepresent the facts and can only be intended to further personal or political agendas as to which Novartis should not be a part,” the company added.
Novartis also revealed that last year it was contacted by lawyers from the special counsel Robert Mueller’s team, which is charged with investigating Russia’s role in the 2016 presidential election.
“Novartis cooperated fully with the Special Counsel’s office and provided all the information requested. Novartis considers this matter closed as to itself and is not aware of any outstanding questions regarding the agreement,” the company added.
This isn’t the first time Novartis has been swept up in a payment-related scandal – Greek authorities investigated the pharma company last year over claims that Novartis made payments to politicians in an attempt to boost sales of its medicines. Earlier this year, Novartis agreed to pay a $25 million fine to the Securities and Exchange Commission to resolve similar allegations involving doctors in China, according to a report from Endpoint News.
