The top lawyer at Swiss drugmaker Novartis is retiring amid controversy over payments made to the law firm of President Donald Trump’s personal attorney, the company said Wednesday.
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Felix Ehrat, the pharmaceutical giant’s group general counsel, will retire effective June 1, replaced by Shannon Thyme Klinger, who currently serves as chief ethics, risk and compliance officer, according to a company statement.
The move appears aimed at moving Novartis past the negative headlines of pay-to-play at a time when the public already has a dim view of pharma companies over high drug prices.
The company revealed last week that it had entered into a contract with Essential Consultants, the Delaware LLC that Trump attorney Michael Cohen had created before the November 2016 election, for $1.2 million. Novartis had made monthly payments of $100,000 to the firm between February 2017 and January 2018.
The FBI raided Cohen’s office and hotel room in New York last month, seizing records of business dealings and payments as part of a non-disclosure agreement with pornographic actress Stormy Daniels — whose real name is Stephanie Clifford — in connection with an alleged affair she had with Trump. Essential Consultants was the entity that was set up to pay Daniels to keep quiet, per news reports.
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With Novartis, the purpose of the agreement with Cohen/Essential Consultants was for Cohen to act as an adviser on how the Trump administration would approach health policy, including the Affordable Care Act, per a company statement last week. Although Novartis had determined after a March 2017 meeting with Cohen that he would not be able to provide the services needed, the contract could not be terminated at will, and the payments reportedly continued.
Subsequently, in November, the office of special counsel Robert Mueller questioned the drugmaker about the payments and the company said it has cooperated fully.
“Although the contract was legally in order, it was an error. As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end,” Ehrat said in a statement.
He was referring to former CEO Joe Jimenez, who retired from the company on Jan. 31. The current CEO is Vas Narasimhan, who replaced Jimenez the next day and was described in last week’s statement as uninvolved with the Essential Consultants agreement.
Nevertheless, Narasimhan called the decision to hire Cohen a “mistake” in an internal email to employees last week following the public disclosure of the contract.
Photo: Felix Ehrat, Novartis