Ethical Dilemma with Stakeholders

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Hour-by-Hour Action Plan (Next 48 Hours)

Hour 0–2 (Immediate Actions)

1. Secure all data & convene core crisis team

   • Gather Head of R&D, Chief Medical Officer, General Counsel, CFO, Head of Communications, and Head of Regulatory Affairs.
   • Direct R&D and Medical to prepare a complete briefing document on the finding: incidence rate, evidence strength, patient risk factors, clinical implications.
   • Instruct Legal to outline mandatory reporting timelines under FDA/EMA regulations and consequences of delay.
   • Reasoning: Need a unified internal understanding of facts, legal duties, and potential pathways before engaging board or public.

2. Direct Medical & Regulatory to draft immediate physician communication

   • Draft a “Dear Healthcare Provider” letter detailing the risk, even before formal regulatory submission.
   • Reasoning: Patient safety cannot wait 6 months for bureaucratic process; ethical obligation to warn prescribers ASAP.

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Hours 3–6

1. Contact regulatory agencies informally & proactively

   • Have Regulatory Affairs head call primary FDA/EMA contacts to alert them of the finding and our intent to submit expedited data.
   • Propose a parallel path: immediate interim warning update via FDA’s “Changes Being Effected” provision if applicable, while full submission proceeds.
   • Reasoning: Demonstrates good faith, may shorten formal timeline, builds regulatory trust, and mitigates legal risk of non-disclosure.

2. Engage PR/Communications firm specializing in crisis healthcare comms

   • Begin drafting public statements, patient Q&A, and internal talking points.
   • Reasoning: Must control narrative; leaks would be catastrophic.

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Hours 7–12

1. One-on-one calls with board members

   • CEO personally calls each board member, especially the three advocating delay.
   • Present data, regulatory advice, and ethical imperative: “If one preventable death occurs because we withheld known risk, liability and reputation damage will be far worse.”
   • Reasoning: Pre-meeting alignment is crucial to avoid board rift; emphasize fiduciary duty includes managing long-term legal/reputational risk, not just stock price.

2. CFO models financial scenarios

   • Model revenue impact with immediate warning, including potential lawsuits, insurance costs, and stock drop.
   • Compare with scenario of delayed disclosure that later becomes a scandal (fines, criminal charges, punitive damages).
   • Reasoning: Show board that short-term stock hit is better than existential threat later.

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Hours 13–24

1. Finalize board meeting materials

   • Include:
     • Clear medical assessment (1 in 8,000 over 5 years = ~500 of current patients potentially at risk).
     • Legal memo on liability for failure to warn (could be gross negligence).
     • Regulatory strategy with timeline.
     • Communications plan.
     • Financial projections.
   • Reasoning: Board needs full picture to make informed governance decision.

2. Develop patient safety plan

   • Create monitoring guidelines for physicians, consider pharmacy-level alerts, update drug labels internally for immediate use.
   • Reasoning: Demonstrates patient-first response; may mitigate legal penalties.

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Hours 25–36

1. Board meeting (4–6 hours)

   • Present findings, recommendations, and imperative for immediate action.
   • Propose board resolution to:
     • Disclose finding to regulators within 24 hours.
     • Issue warning to healthcare providers within 72 hours.
     • Publicly announce before earnings call.
   • Reasoning: Board must vote to authorize action; their buy-in is legally and strategically essential.

2. If board resists, CEO must consider resigning and whistleblowing

   • Reasoning: Personal legal liability for CEO if knowingly concealing serious risk. Ethics override job retention.

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Hours 37–48

1. Execute disclosure actions

   • Submit formal expedited report to regulators.
   • Release “Dear Doctor” letter via secure channels.
   • Finalize public announcement for next morning (pre-market).
   • Reasoning: Once decided, move swiftly to avoid leaks and show decisiveness.

2. Prepare earnings call script

   • Announce revenue impact projections, outline patient safety steps, express regret, and reaffirm company mission.
   • Reasoning: Transparency reduces uncertainty; markets hate surprises but respect responsible handling.

3. All-hands meeting for employees

   • Explain situation, company’s ethical choice, and unite behind patient safety.
   • Reasoning: Maintain morale and prevent internal rumors/lack of alignment.

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Key Principles Behind Decisions

1. Patient Safety First

   • Concealing a known serious risk is ethically unacceptable and legally indefensible. The 1 in 8,000 risk is not trivial; over 4 million patients, that’s hundreds potentially affected.

2. Legal Liability Minimization

   • Willful failure to report can lead to criminal charges, massive punitive damages, and loss of insurance. Immediate disclosure reduces culpability.

3. Regulatory Relationship

   • Proactive engagement builds trust and may lead to more cooperative handling. Hiding and being discovered destroys credibility.

4. Financial Impact Management

   • A 40% stock drop is severe, but discovery of a cover-up could bankrupt the company (see Purdue Pharma, Vioxx). Better a controlled, honest disclosure.

5. PR Strategy

   • Frame as “our vigilance uncovered this, and we’re acting responsibly to protect patients.” This can preserve some reputation.

6. Board Dynamics

   • Align them with moral and legal reality; if they refuse, CEO must not comply with a cover-up.

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Earnings Call (72 Hours Out)

• Pre-announce press release before markets open.
• On call: Lead with the issue, explain actions taken, provide revised guidance, take Q&A.
• Message: “We put patients first. Short-term financial pain is necessary to maintain trust and our license to operate.”

This approach balances ethical duty, legal compliance, and long-term corporate survival. The stock will drop, but the company can recover with integrity intact.