Why the drugmaker that paid Trump’s lawyer $1.2 million is so worried

May 11 2018

President Donald Trump didn't mention Novartis or other drugmakers by name last year when he said the industry is "getting away with murder."

Yet executives at the Switzerland-based pharmaceutical giant shelled out $1.2 million to Trump lawyer Michael Cohen to "advise" its executives on health policy and what was happening in the Trump White House.

Novartis paid more money to Cohen than did any of his clients revealed thus far.

The company said it quickly determined he was unable to deliver the help but paid the full amount owed in his contract. "We made a mistake" in hiring him, CEO Vasant Narasimhan told Novartis employees on Thursday.

Hiring the president's personal attorney matches a history of aggressively courting government officials by a corporation with much to lose in the debate over high drug prices.

Novartis has nine blockbuster drugs generating around $1 billion or more in annual sales and priced so high in some cases that patients have trouble affording them even with insurance. Another nine drugs produce more than $500 million in sales.

High costs and copayments for Novartis' Gleevec, which treats a form of leukemia, are associated with patients delaying or skipping doses, said researcher Stacie Dusetzina of Vanderbilt University.

Gleevec often must be taken for life and costs $148,000 a year — three times more than when it came out, according to Connecture, which provides technology to help people save money on prescriptions.

Novartis also makes drugs for psoriasis and multiple sclerosis that cost more than $100,000 a year. The price tag for Kymriah, a Novartis leukemia treatment approved last year, is $475,000.

The company earned $7.7 billion in profits last year on worldwide sales of $49 billion.

Novartis' political action committee has been a sizable contributor on Capitol Hill, donating $204,500 last year to candidates for federal office and other political causes.

The company spent $8.8 million lobbying U.S. lawmakers in 2017, its highest amount ever, according to the Center for Responsive Politics. That doesn't count the previously undisclosed payments to Cohen, which the company said were for consulting, not lobbying.

One issue that especially interests the company: the importation of drugs from Canada and other countries, which would undercut its high U.S. prices and badly hurt profits. Novartis sells its drugs for a fraction of U.S. prices in other developed countries. In 2015, Gleevec sold for $38,000 a year in Canada while a generic version of the same drug sold for only $8,800.

Importation was one of Novartis' most lobbied issues last year.