Ethical Dilemma with Stakeholders

As CEO, this is the defining moment of my career and the company’s history. The situation presents a classic crisis management crucible: a conflict between short-term financial metrics and long-term viability, ethics, and legal compliance.

With 4 million active users, a 1 in 8,000 risk translates to 500 potential cases of liver failure over 5 years. Waiting is not an option. Historically, pharmaceutical companies that delay disclosure of fatal side effects (e.g., Merck with Vioxx, Purdue Pharma) face catastrophic DOJ fines, criminal prosecution, and total loss of public trust.

My overarching strategy is Radical Transparency and Proactive Mitigation. We will take the short-term 40% stock hit to save the company from bankruptcy and criminal liability later. Furthermore, conducting an earnings call in 72 hours without disclosing this material risk constitutes egregious securities fraud.

Here is my hour-by-hour action plan for the next 48 hours leading up to the Board Meeting.

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Phase 1: Triage & Independent Verification (Hours 1–12)

Hour 1-3: Establish the Crisis War Room & Retain Outside Counsel

• Action: Convene a restricted War Room with the Chief Medical Officer (CMO), Chief Financial Officer (CFO), Head of R&D, and Head of Corporate Communications. Simultaneously, I will immediately retain independent, external SEC/FDA legal counsel.
• Reasoning: Internal legal’s claim that reporting takes "6 months" is a bureaucratic timeline for formal label changes, not an excuse to hide data. I need independent legal advice to protect the company (and myself) from internal blind spots. SEC rules require immediate disclosure of material information prior to an earnings call.

Hour 4-8: Medical Deep-Dive & Mitigation Strategy

• Action: Have the CMO and lead researchers present the raw data. We need to answer three questions:
  1. Is there a demographic or co-morbidity link to the liver failure?
  2. Can we detect it early via routine blood tests (e.g., elevated ALT/AST liver enzymes)?
  3. Are there safer alternative pain management protocols we can recommend?
• Reasoning: Patient Safety. If we can identify a vulnerable sub-population or mandate quarterly liver enzyme testing, we might not have to pull the drug entirely. We can transition to a "Black Box Warning" with a Risk Evaluation and Mitigation Strategy (REMS). We must present a solution, not just a problem, to the FDA and the public.

Hour 9-12: Financial Modeling & SEC Compliance

• Action: Work with the CFO and outside counsel to draft an SEC Form 8-K (used to notify investors of unscheduled material events). Model the financial impact of a 40% drop, potential class-action lawsuits, and the cost of implementing a REMS program.
• Reasoning: Financial/Legal. We cannot legally hold an earnings call in 72 hours without disclosing this. If we do, we commit securities fraud. The 8-K must be drafted and ready to file immediately after the board meeting.

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Phase 2: Stakeholder Alignment & Drafting (Hours 13–24)

Hour 13-18: Lobbying the Board (The "Pre-Meeting")

• Action: Call the Board Chairman and the non-dissenting board members individually. Then, call the three dissenting members. I will share outside counsel’s explicit warning regarding personal criminal liability for corporate officers and directors who knowingly withhold life-threatening data from investors and the FDA.
• Reasoning: Corporate Governance. I need the votes. The three members pushing to "wait for more data" are acting out of financial fear. By clearly explaining that waiting constitutes fraud and carries the risk of prison time and personal financial ruin, I will shift their fear from the stock price to legal liability.

Hour 19-24: Drafting the Communications Package

• Action: Direct Corporate Comms and Medical Affairs to draft the following:
  • A voluntary notification to the FDA.
  • A "Dear Healthcare Provider" (DHCP) letter alerting doctors to the risk and recommending immediate liver enzyme screening for active patients.
  • A public press release.
  • An internal company-wide memo.
• Reasoning: PR & Regulatory. We must control the narrative. The story must be: "Our robust internal safety monitoring caught something the clinical trials missed. We are acting immediately to protect patients." If the FDA or a whistleblower finds out before we report it, we lose all credibility.

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Phase 3: Infrastructure Prep (Hours 25–36)

Hour 25-30: Patient & Employee Support Infrastructure

• Action: Authorize the immediate creation of a 24/7 patient hotline staffed by nurses to answer questions about liver symptoms. Brief the HR department to prepare for employee anxiety regarding stock options, layoffs, and morale.
• Reasoning: Ethics & Morale. 4 million people are going to wake up terrified. We must have a system in place to triage their concerns so emergency rooms aren't overwhelmed. Employees will feel betrayed and worried about their jobs; they need to hear from me that we are doing the right thing and the company will survive.

Hour 31-36: Earnings Call Pivot

• Action: Completely scrap the original earnings call script. Rewrite it with the CFO to focus entirely on the disclosure, the financial impact, our cash reserves to weather the storm, and our proactive path forward with the FDA.
• Reasoning: Financial Strategy. Wall Street hates bad news, but they hate uncertainty even more. By providing a clear, worst-case scenario financial model, we establish a "floor" for the stock drop.

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Phase 4: The Showdown & Execution (Hours 37–48)

Hour 37-40: The Board Meeting

• Action: Present the data, the medical mitigation plan (enzyme testing), the external legal opinion, and the communications package. I will formally recommend immediate disclosure to the FDA and SEC. I will force a recorded vote.
• Reasoning: Legal Liability. If the board votes me down, I have a fiduciary and ethical duty to resign and report the issue to the SEC as a whistleblower. However, with the groundwork laid in Hours 13-18, the board will almost certainly vote to disclose.

Hour 41-44: Regulatory & SEC Execution

• Action: Immediately following board approval, dispatch the legal/medical team to notify the FDA (requesting an emergency meeting to discuss a label change and REMS program). Concurrently, file the Form 8-K with the SEC and halt trading of our stock pending the release of material news.
• Reasoning: Regulatory Relationships. Partnering with the FDA rather than hiding from them is the only way to keep this drug on the market for the patients who rely on it without suffering side effects.

Hour 45-48: Public & Internal Rollout

• Action:
  • Publish the Press Release.
  • Send the "Dear Healthcare Provider" letter to all prescribing physicians.
  • Send the internal memo to all employees, followed by a brief company-wide video message from me.
  • Final prep for the Earnings Call (now 24 hours away).
• Reasoning: Leadership. In a crisis, the CEO must be the face of the company. The message to employees and the public is simple: "We are a company founded on saving and improving lives. When data showed a risk to that mission, we didn't hesitate. We are taking a financial hit today because patient safety is, and always will be, our non-negotiable priority."

Post-48 Hours (The Earnings Call): I will step onto the earnings call having already ripped off the band-aid. The stock will plummet, but the company’s legal standing, ethical integrity, and long-term relationship with the FDA will be secured.