The disclosure that the pharmaceutical giant Novartis paid over $1 million to President Donald Trump’s lawyer Michael Cohen may not be a scandal Trump’s foes hope for, but it may help answer why drug prices are so high.
Novartis, AT&T and Korea Aerospace Industries were named as companies that had contracted Cohen’s consulting company by Michael Avenatti, the attorney for porn actress Stormy Daniels. Cohen reportedly paid Daniels $130,000 before the 2016 presidential election to keep quiet about an alleged affair with Trump a decade prior.
What exactly did Cohen do in exchange? Nothing at all, apparently.
Novartis signed a year-long contract with Essential Consultants in February 2017, believing he could provide advice “as to how the Trump administration might approach certain US healthcare policy matters, including the Affordable Care Act,” the Swiss-based pharmaceutical company said.
After meeting Cohen in March, however, Novartis decided he would be “unable to provide the services” that the company had in mind, the company said on Wednesday. Yet they continued to pay him another $1 million through February 2018 because the contract could not be terminated. As Trump himself might say, that’s a terrible deal.
Meanwhile, the company was raising the prices of two of its cancer medications, Gleevec and Arranon, far in excess of inflation, according to a study published last fall in the Journal of Clinical Oncology.
Led by Dr. Daniel Goldstein of Emory University in Atlanta, the study found a disproportionate increase in the price of cancer drugs approved since 1996. The price of Gleevec went from $26,000 in 2001 to $140,000 in 2017, while Arranon’s price increased by 55 percent (adjusted for inflation) from around $18,513 when it was launched, despite the availability of generics.
Some of Trump’s critics have suggested that Novartis paid Cohen for access to Trump, including the presence of the company’s CEO Vas Narasimhan at a dinner with the US president, on the sidelines of January’s World Economic Forum in Davos. Novartis explicitly denied that, however.
“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 said.
The anti-Trump #Resistance on Twitter was not convinced.
White House press secretary Sarah Huckabee Sanders was asked on Wednesday if Trump had taken any action to benefit Novartis, AT&T or Korea Aerospace.
“Not that I’m aware of,” she replied.
Special Counsel Robert Mueller’s investigators talked to Novartis about the contract back in November 2017, the company said, adding that it “considers this matter closed.”
One possible explanation for corporations shelling out so much money for no tangible return was that they were trying to buy information about the inner workings of the Trump White House. The lobbying payments would be considered the cost of doing business - and passed on to the consumers.
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