The CEO of Swiss pharma giant Novartis voluntarily gave up $400,000 of his bonus, thanks to a controversy swirling around the world's most expensive drug
- Novartis CEO Vas Narasimhan requested he not receive a portion of his bonus that's tied to building trust with society, according to a recent company report.
- Narasimhan cited a data manipulation scandal surrounding the Swiss pharma giant's new gene therapy called Zolgensma. The board agreed with the CEO's request to withhold that portion of his 2019 bonus.
- The data controversy led to the firing of two senior executives. Leading Democratic senators, including Bernie Sanders and Elizabeth Warren, have criticized Novartis, saying the controversy "smacks of the pharmaceutical industry's privilege and greed."
- Narasimhan still made nearly $11 million in 2019. Building societal trust was 8% of his total bonus, translating to roughly $400,000 if he did receive the full bonus.
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Novartis CEO Vas Narasimhan is taking a voluntary pay cut, thanks to a controversy swirling around one of the company's marquee treatments.
Narasimhan requested that he not receive part of his 2019 bonus that's related to "building trust with society," because of a data-manipulation controversy related to a gene therapy called Zolgensma. That portion of his bonus could be worth roughly $400,000, according to Business Insider's calculations.
"While important progress was made in this area, given the reputational impact of the Zolgensma data integrity issue, the CEO has requested that he not receive an incentive payout for his 'building trust with society' objective," Novartis' annual report states. "The Board of Directors agreed with this request."
The Swiss pharma giant launched Zolgensma in May 2019 at a record price of $2.1 million. The one-time treatment delivers life-changing benefits to infants with the rare disease spinal muscular atrophy.
In applying for approval, Novartis submitted manipulated mice testing data to US regulators, the US Food and Drug Administration said in August. Novartis didn't inform regulators until after Zolgensma won approval, even though it knew of the problems beforehand, according to the FDA. The company ultimately fired two senior executives at AveXis, its subsidiary that makes Zolgensma.
The FDA has said it's confident the treatment should remain on the market.
A spokesperson for Novartis confirmed that Narasimhan requested not to receive part of his bonus, and said Business Insider's calculation of the amount forgone is "in the right range."
Five Democratic senators, including presidential candidates Bernie Sanders and Elizabeth Warren, said the "scandal smacks of the pharmaceutical industry's privilege and greed" in a letter to FDA officials.
The "building trust with society" goal makes up 8% of Narasimhan's bonus pay, translating to roughly $400,000 of his maximum potential bonus. Overall, he still made nearly $11 million last year in total compensation. Much of Narasimhan's bonus is linked to financial measures, like sales and income.
Read more:
- Novartis just laid out the playbook for making its $2.1 million gene-therapy treatment a blockbuster. Here are the next steps.
- Aetna and Anthem will now pay for more kids with a devastating rare disease to get a $2.1 million drug, reversing earlier denials
- Controversy is swirling around the world's most expensive drug. Here's everything we just learned in a new 59-page letter from Swiss drug giant Novartis.
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