'Not a good day for Novartis': how the Novartis-Cohen crisis unfolded

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Novartis's CEO earlier this week admitted the company made a mistake signing the contract with President Trump's lawyer Michael Cohen.

In an email sent to employees Thursday, CEO Vasant Narasimhan wrote, “Yesterday was not a good day for Novartis,” before acknowledging that it was a mistake to work with Cohen and his firm Essential Consultants. 

The pharma giant's connection with Cohen had been revealed the day before by Michael Avenatti, the lawyer in Stormy Daniels' case involving President Donald Trump. The pharma company had signed a one-year contract with Cohen's firm Essential Consultants in February 2017, worth $1.2 million.

Novartis's initial response was that the contract was signed under the company's previous CEO Joseph Jimenez, who resigned in February 2018, and that the current CEO had no involvement with it. More details about the contract were released by Novartis, including the full amount paid to Cohen and that Cohen ultimately did not provide any services, via a statement on Wednesday.

“With the recent change in administration, Novartis believed that Michael Cohen could advise the company as to how the Trump administration might approach certain US healthcare policy matters, including the Affordable Care Act,” the company's statement read. “In March 2017, Novartis had its first meeting with Michael Cohen under this agreement. Following this initial meeting, Novartis determined that Michael Cohen and Essential Consultants would be unable to provide the services that Novartis had anticipated related to U.S. healthcare policy matters and the decision was taken not to engage further.”

One anonymous Novartis employee told STAT the company was trying to get in with the “new players” of the Trump administration, and Cohen promised that access. 

The company also said it was contacted by Special Counsel Robert Mueller in November 2017 and had cooperated with the inquiries. 

On Friday, U.S. Senator Ron Wyden (D-OR) opened a new investigation into the relationship between Novartis and Essential Consultants, seeking to get copies of all correspondence between the two and to find out who at Novartis set up the relationship. 

Cohen, and his firm, are tied to several Trump scandals, including the Russia investigation and the alleged affair and hush money payment between Trump and Stormy Daniels. AT&T was also revealed to have paid Cohen's firm $600,000 for similar insights and access to the new administration.

“These are big companies, they do great work and they'll be fine at the end [of the crisis],” said Christopher Harvin, partner at communications and political advisory firm Sanitas International. “But they have to navigate this carefully. They have to be honest with their employees, stakeholders, they have to be fully transparent in all directions.” 

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