Letter to Vasant Narasimhan, M.D., Chief Executive Officer of Novartis - Smith Presses Swiss Pharmaceutical Giant Novartis to Ensure Improper Company Actions Aren't Pushing Up U.S. Prescription Drug Prices

Letter

Dear Dr. Narasimhan;

The Senate Committee on Health, Education, Labor, and Pensions recently held hearings to examine the skyrocketing price of prescription drugs. As a member of that committee, I am interested in how the pharmaceutical industry's lobbying practices and disregard for anticorruption laws may contribute to high drug prices. Therefore, I ask that you provide information regarding your company's adherence to standards governing the company's lobbying practices and anti-corruption measures.

As you know, Michael Cohen, President Donald Trump's personal lawyer, recently pleaded guilty to eight criminal charges, including counts relating to illegal campaign contributions. In May, your company confirmed that it paid nearly $ 1.2 million to Cohen, through a shell corporation. Essential Consultants, purportedly for insights into the Trump administration s views on health care. The contract, which your former Group General Counsel later conceded was "an error," coupled with Novartis's past violations of U.S. and foreign anticorruption laws, raises significant questions about what steps must be taken to address improper influence by pharmaceutical companies like yours.

As noted above, the Cohen payments are not the first time Novartis has made potentially suspect payments to influence policymakers. In 2016, the Securities and Exchange Commission ("Commission") investigated improper payments made by Novartis in China, and determined that Novartis had failed to establish an effective anti-corruption compliance program to detect and prevent such pay-for-play schemes. As a result of the investigation, Novartis agreed to pay more than $20 million in fines and implement anti-corruption compliance measures, including reporting to the Commission any "questionable or corrupt payments."3 Most concerning, the payments Novartis made to Cohen, via Essential Consultants, were initiated after the company agreed to implement these anti-corruption measures.

In order to better understand industry practices and your compliance with the Commission's settlement, I ask that you provide the following documents:

The initial report and any follow up reports submitted by Novartis to the Commission pursuant to the Commission's March 23, 2016 order (File No. 3-17177), and
Any other correspondence or reports submitted by Novartis to the Commission regarding payments to President Trump's former personal attorney Michael Cohen as required by the Commission's 2016 order.
I request your response by September 7, 2018. Please have your staff contact Beth Wikler or Tim Everett of my staff at (202) 224-5641 with any questions. Thank you for your assistance.

Sincerely,

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