Historical Stock Chart
6 Months : From May 2018 to Nov 2018
By Joe Palazzolo and Michael Rothfeld
Novartis AG made misleading statements playing down its 2017 relationship with President Donald Trump's then-personal lawyer, according to a report released Friday by Democratic senators that shed new light on the company's consulting contract with the lawyer, Michael Cohen.
The report also reveals Mr. Cohen's advocacy for another pharmaceutical company, one the report says has ties to an investment firm associated with Viktor Vekselberg, a wealthy Russian businessman now under U.S. sanctions.
The $1.2 million consulting deal with Novartis came to light in May. Then the Switzerland-based drug company said it hired Mr. Cohen for insight into how "the Trump administration might approach U.S. health-care policy matters," but that executives realized from their first meeting with him in March 2017 that he wouldn't be helpful and stopped engaging with him.
In response to requests for information from Democratic senators, Novartis provided emails showing that Mr. Cohen's contact with then-Novartis Chief Executive Joe Jimenez continued over the next six months.
The two men had at least four phone calls and exchanged multiple emails about the Trump administration's drug-pricing proposals, litigation stemming from the opioid crisis and Novartis's potential investment in a small company backed by Columbus Nova, another of Mr. Cohen's consulting clients, the senators said in their report.
"These communications are plainly inconsistent with Novartis's statement that they 'decided not to engage with [Mr. Cohen] further' following the March 1 meeting," the report said.
Novartis said Friday it disagreed with the report's conclusion.
"We never asked Mr. Cohen to perform any services on our behalf after March 1, nor did he perform any," the company said.
Federal agents and prosecutors in Manhattan are investigating whether Mr. Cohen illegally engaged in undisclosed lobbying, as part of a broader probe into Mr. Cohen's business dealings, The Wall Street Journal previously reported.
"Mr. Cohen, who never introduced anyone from Novartis to anyone in the administration or Congress, did not 'sell access,'" said Lanny Davis, a lawyer for Mr. Cohen, referring to part of the report's title. "As a consultant, he provided strategic advice to his client."
In June 2017, Mr. Jimenez sent Mr. Cohen a plan containing ideas for reducing drug prices, according to an email cited in the report. In another cited email, Mr. Cohen promised to share it with an unidentified person linked to the Trump administration.
In its statement Friday, the company said Mr. Cohen had asked Mr. Jimenez for ideas to lower drug prices and Mr. Jimenez provided some the industry had been discussing publicly.
Several policies in the Novartis document were eventually adopted in the administration's drug-pricing plan, "although the relationship between the administration's actions and this document is unclear," the senators' report said.
The report said Mr. Cohen attempted in August 2017 to convince Novartis to invest in Yamo Pharmaceuticals LLC, a company "closely connected" to another Cohen consulting client, the investment firm Columbus Nova. Columbus Nova's biggest investor is a company founded by Mr. Vekselberg. Columbus Nova is run by Mr. Vekselberg's cousin, Andrew Intrater, who was also an investor in and adviser to Yamo, according to documents obtained by the senators.
Novartis didn't make the investment and Yamo didn't pay Mr. Cohen, the report said. Yamo said the company's chief executive was unaware of Mr. Cohen's connection to Mr. Trump, Novartis and Columbus Nova.
Columbus Nova, asked for comment, referred to Yamo's statement.
Novartis said in May that it continued paying Mr. Cohen for the one-year deal because it couldn't escape the contract. But the senators' report said the negotiated language could have allowed Novartis to walk away from the contract "based on Mr. Cohen's inability to meet the terms."
"In hindsight -- and certainly knowing everything we know now -- we should have tried to terminate the contract with Mr. Cohen regardless of our views at the time of its legal enforceability," the company said Friday.
--Brian Blackstone and Rebecca Davis O'Brien contributed to this article.
(END) Dow Jones Newswires
July 13, 2018 16:29 ET (20:29 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.