NVS Novartis AG

Novartis AG's chief ethics and compliance officer, Eric Cornut, is retiring from his role, according to a company spokesman.

Mr. Cornut—who reported directly to Chief Executive Joe Jimenez—had been in the post since August 2014, when Novartis created the position to raise the compliance function to the highest levels of the company. He will stay on as a special adviser on government affairs to Mr. Jimenez, the spokesman said.

Shannon Klinger, previously general counsel for Novartis's generic-drug division, Sandoz, took up the ethics-and-compliance role on Sunday, though Mr. Cornut, 58, won't step down from his duties until June 1 to assist with the handover, the spokesman added. Unlike Mr. Cornut, Ms. Klinger will also head litigation for Novartis in her new role.

Mr. Cornut's retirement comes at a challenging time for the company. Novartis is facing allegations by the U.S. Department of Justice that it engaged in a decadelong kickback scheme in which it held nearly 80,000 "sham" educational events for doctors to induce them prescribe its heart drugs. The government has claimed these events contained "little or no educational content" and were instead used to funnel kickbacks such as expensive meals to doctors.

Novartis has said it disagrees with the government's characterization of its behavior and disputes the allegations.

Last year, Novartis paid $390 million to the Justice Department to settle allegations that the company induced specialty pharmacies to boost prescriptions for Novartis drugs by paying kickbacks in the form of rebates.

In settling, Novartis admitted to a series of facts relating to its relationship with specialty pharmacies, but neither admitted nor denied wrongdoing. Mr. Jimenez has said the rebates were designed to induce specialty pharmacies to ensure that patients completed a course of medicine.

Mr. Cornut spent his nearly two years in post leading the development of an integrity and compliance program "that is further strengthening Novartis's culture, reporting and commercial relationships around the world," according to the spokesman.

Mr. Cornut's career at the drugmaker began in 1989 at Ciba-Geigy, which merged with Sandoz in 1996 to form Novartis. Prior to his current role, he was chief commercial officer, overseeing affairs such as drug pricing. Before then, he led Novartis's European pharmaceuticals business.

Write to Denise Roland at Denise.Roland@wsj.com

(END) Dow Jones Newswires

May 03, 2016 08:15 ET (12:15 GMT)

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