48-Hour Crisis Action Plan

Immediate Decision Framework

Core Principle: Patient safety supersedes all other considerations. Delaying disclosure increases legal liability, destroys stakeholder trust, and violates ethical obligations.

Hour-by-Hour Action Plan

Hours 0-4: Immediate Assessment & Legal Protection

• Hour 0-1: Convene emergency meeting with Chief Medical Officer, General Counsel, and Head of Regulatory Affairs

  • Document the finding formally with timestamps
  • Initiate legal privilege protocols for internal investigation

• Hour 1-3: Legal team begins:

  • Drafting FDA safety report (even if 6-month formal process, we start NOW)
  • Preparing disclosure documents for SEC (material information)
  • Reviewing insurance policies and indemnification provisions

• Hour 3-4: CMO team:

  • Compiles all available data on the side effect
  • Begins drafting medical advisory for healthcare providers
  • Identifies patients currently on medication for risk stratification

Reasoning: Creating legally privileged documentation protects the investigation while ensuring we move swiftly on regulatory requirements.

Hours 4-12: Internal Alignment & Preparation

• Hour 4-6: One-on-one calls with each board member

  • Present the data clearly
  • Explain legal requirement to disclose material information
  • Emphasize that delay increases personal liability for directors

• Hour 6-8: Assemble Crisis Management Team:

  • CEO, CMO, CFO, General Counsel, Head of Communications, Head of Regulatory
  • Assign specific workstreams with 24-hour deliverables

• Hour 8-12: Parallel workstreams:

  • Medical: Develop patient monitoring protocols
  • Financial: Model impact scenarios, prepare investor materials
  • Communications: Draft press releases, Q&A documents, stakeholder letters
  • Regulatory: Prepare expedited safety report for FDA

Reasoning: Board alignment is critical - directors who understand their personal liability are more likely to support immediate action. Parallel workstreams maximize efficiency.

Hours 12-24: Strategic Development

• Hour 12-16: Develop comprehensive response strategy:

  • Patient support program (free liver monitoring, medication assistance)
  • Healthcare provider education initiative
  • Updated warning labels and medication guides
  • Financial assistance fund for affected patients

• Hour 16-18: Executive team dinner meeting

  • Align on messaging
  • Assign spokesperson roles
  • Review worst-case scenarios

• Hour 18-24: Document review and refinement:

  • Legal review of all communications
  • Medical accuracy check
  • Regulatory compliance verification
  • SEC disclosure drafting

Reasoning: A comprehensive response plan shows we're taking this seriously and helps restore confidence despite the bad news.

Hours 24-36: Pre-Board Preparation

• Hour 24-28:

  • Conduct tabletop exercise with crisis team
  • Practice Q&A for difficult questions
  • Refine board presentation materials
  • Schedule emergency FDA meeting request

• Hour 28-32: Stakeholder preparation:

  • Alert major institutional investors (under NDA) of upcoming material disclosure
  • Prepare employee communication for all-hands meeting
  • Brief customer service on expected patient inquiries
  • Alert manufacturing about potential label changes

• Hour 32-36: Final preparations:

  • Conference call with external crisis management firm
  • Review D&O insurance coverage with broker
  • Finalize patient hotline staffing
  • Complete board presentation deck

Reasoning: Preparation prevents panic. Having responses ready for all stakeholders maintains control of the narrative.

Hours 36-48: Board Meeting & Decision

• Hour 36-40: Pre-board session with supportive directors

  • Build coalition for immediate disclosure
  • Address concerns privately
  • Secure votes for action

• Hour 40-44: BOARD MEETING

  • Present findings comprehensively
  • Propose immediate disclosure plan
  • Call for vote on:
    1. Immediate FDA notification
    2. SEC 8-K filing within 24 hours
    3. Patient notification program
    4. Revised earnings call agenda

• Hour 44-48: Post-board actions:

  • File FDA expedited safety report
  • Finalize SEC disclosure
  • Alert communications team to execute
  • Schedule emergency all-hands meeting
  • Notify key medical opinion leaders

Reasoning: The board meeting must result in decisive action. Having pre-built coalition ensures we move forward even with dissent.

Key Strategic Decisions & Rationale

1. Immediate Disclosure (Not Waiting)

• Legal: Waiting increases liability exponentially - we know of material risk NOW
• Ethical: Every day of delay potentially harms patients
• Financial: Controlled disclosure better than leak or FDA action
• Trust: Transparency, though painful, preserves long-term credibility

2. Proactive Patient Support Program

• Offering free liver monitoring shows commitment to safety
• Creates positive narrative amid negative news
• Reduces litigation risk by showing good faith

3. Accelerated Earnings Call Disclosure

• Disclose BEFORE earnings call, not during
• Prevents appearance of burying bad news
• Allows focus on response plan, not just problem

4. Employee Communication Priority

• Employees hear from us first, not media
• Maintains morale and prevents exodus
• Employees become ambassadors if treated with respect

Expected Outcomes

Short-term (1-6 months):

• Stock price decline: 35-45%
• FDA warning letter likely
• Multiple lawsuits filed
• Intense media scrutiny

Long-term (6-24 months):

• Stock recovery to -15-20% if handled well
• Strengthened safety reputation
• Improved regulatory relationship
• Potential competitive advantage from transparency

Critical Success Factors

1. Unified Leadership: Board and executives must speak with one voice
2. Patient-First Messaging: Every communication emphasizes patient safety
3. Transparent Timeline: Acknowledge what we knew and when
4. Concrete Actions: Show specific steps to address the issue
5. Accessible Leadership: CEO must be visible and accountable

Final Note to Board

"Board members, our decision today defines our company's character. Yes, disclosure will hurt financially in the short term. But consider the alternative: If we delay and a patient dies from liver failure tomorrow, knowing we could have warned them today, we face not just lawsuits but criminal liability. We face not just financial loss but the destruction of our company's reputation and our personal integrity.

The right choice is clear: We disclose immediately, we support our patients comprehensively, and we demonstrate that when faced with a choice between profits and patients, we choose patients. This is how we build a company that lasts."

The earnings call in 72 hours will not be about this quarter's numbers - it will be about our values and our future. Let's make sure we can stand behind both.