“Although the contract was legally in order, it was an error,” Ehrat said in a statement. “As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end.”
The contract has been a major embarrassment for one of the world's largest drug companies. Its current chief executive, Vasant Narasimhan, who was not involved in the contract, called it a mistake at an event Wednesday with investors and analysts at the company's global headquarters in Basel.
“The world rightly expects more from a leading health-care company,” Narasimhan said, according to a company press release. “Our new executive team and I have a deep commitment to ensure we always operate with the highest integrity and sound judgment and will work hard to rebuild lasting trust with society."
The announcement comes days after AT&T chief executive Randall Stephenson said the top official in the company's Washington office was leaving over a consulting deal with Cohen. In a memo to the staff, Stephenson said the agreement to pay $600,000 to Cohen was a “big mistake.”sound judgment, and will work hard to rebuild lasting trust with society.”
Novartis' former chief executive, Joseph Jimenez, who initiated the contract, has not responded to multiple requests for comment. He stepped down as chief executive at the end of January.
In an interview with Forbes' Matthew Herper, Jimenez said that an unnamed third party connected him with Cohen. The former Novartis chief said Cohen told him in a phone conversation he could help navigate the Trump administration and the effort to repeal and replace the Affordable Care Act.
“If we were the experts on policy, he was the expert on the way that they think. Together as a team it could be a way for us to better navigate what was going to be a pretty sticky Affordable Care Act repeal-and-replace," Jimenez told Forbes.
In February 2017, Novartis entered into a year-long $1.2 million contract with Cohen and his company Essential Consultants.
Jimenez told Forbes that he takes responsibility for the contract and wishes the company had done more due diligence on Cohen. After the first meeting with Cohen, in March 2017, Novartis executives decided not to pursue the relationship. Novartis continued to pay Cohen $100,000 a month because the contract could only be terminated for cause -- which would have opened up a legal battle that Jimenez told Forbes would have cost more than letting the contract lapse. He said Cohen did call the company with advice it did not use, to build a plant in the U.S. and to work on combating the opioid epidemic.
"We should have just terminated the contract, lived with the financial consequences and put the potential reputational risk over financial risk," Jimenez told Forbes.
Novartis has declined to make the contract available, unleashing speculation about what specific issues the company might have sought to discuss with the Trump administration.
Last year, Novartis received approval for a novel cancer therapy priced at $475,000 that uses patients' genetically altered cells to fight disease.
“We made a mistake in entering into this engagement and, as a consequence, are being criticized by a world that expects more from us,” Narasimhan wrote in an email to employees last week.