48-Hour Crisis Action Plan: Drug Safety Disclosure

Immediate Core Principle: Patient safety and regulatory compliance supersede short-term financial considerations. Deliberate concealment creates greater legal liability, catastrophic reputational risk, and preventable patient deaths. This plan prioritizes transparent, immediate action.

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HOURS 0-8: CRISIS ACTIVATION & IMMEDIATE COMPLIANCE

Hour 0 (Now):

• Action: Convene emergency leadership war room (CEO, CMO, General Counsel, Head of R&D, Chief Compliance Officer, CFO). Issue immediate information lockdown with attorney-client privilege protocols.
• Reasoning: Need unified command structure and privileged legal strategy. Prevents uncoordinated leaks that could trigger securities fraud allegations.

Hour 1-2:

• Action: Demand complete data package from research team: raw data, patient demographics, causality assessment, comparison to background liver failure rates.
• Reasoning: Must independently verify science before any external action. Establishes factual foundation for all decisions.

Hour 2-3:

• Action: Engage top-tier external crisis counsel (regulatory and securities law specialists) and FDA regulatory consultants.
• Reasoning: Internal legal team may have conflicts; external experts provide credible, independent validation of strategy and strengthen "good faith" defense.

Hour 3-4:

• Action: CMO leads deep-dive medical review: confirm 1/8,000 risk calculation, identify all 12-15 likely cases, assess whether this qualifies as a "15-day alert" reportable event (serious, unexpected, >3x background rate).
• Reasoning: Legal trigger: FDA mandates reporting within 15 calendar days of awareness. We're already on the clock.

Hour 4-5:

• Action: CEO personally calls FDA Division Director (not just MedWatch) to verbally notify of potential safety signal, request emergency meeting.
• Reasoning: Demonstrates good faith, urgency, and transparency. Builds regulatory partnership rather than adversarial relationship. Officially starts compliance clock.

Hour 5-6:

• Action: Draft initial FDA notification package: safety report, proposed risk mitigation plan, timeline for label update.
• Reasoning: Proactive submission shows control and responsibility, likely reducing FDA penalties and speeding review process.

Hour 6-8:

• Action: Begin drafting "Dear Healthcare Professional" letter and patient alert. Set up dedicated safety hotline (1-800 number) and crisis website infrastructure.
• Reasoning: Direct patient/physician communication is ethical imperative. Preparation prevents delays once board approves.

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HOURS 8-24: STRATEGIC MODELING & BOARD PREPARATION

Hour 8-12:

• Action: CFO models three scenarios: (1) immediate disclosure (est. 30% stock drop), (2) delayed 6-month disclosure with leak risk (est. 50%+ drop, criminal liability), (3) concealment leading to deaths (bankruptcy, personal director liability). Include legal cost projections: punitive damages, SEC fines, DOJ investigation.
• Reasoning: Quantifies that transparency is financially optimal long-term. Directors face personal liability for knowingly approving concealment (Caremark duty).

Hour 12-14:

• Action: General Counsel briefs on legal exposure: securities fraud (SEC Rule 10b-5), product liability (failure-to-warn), RICO if conspiracy proven. Estimates $5B+ liability for concealment vs. $500M for immediate action.
• Reasoning: Personal criminal exposure for CEO/board members shifts decision calculus. "Wait for data" is not a legal defense.

Hour 14-16:

• Action: CEO conducts confidential 1-on-1 calls with three independent board directors (audit committee chair, lead independent director, medical affairs committee chair). Present facts, not opinions.
• Reasoning: Prevents groupthink, builds coalition before meeting. Independent directors have fiduciary duty to patients/public, not just shareholders.

Hour 16-18:

• Action: CMO drafts new risk-benefit analysis: for chronic pain patients, drug still has positive net benefit, but needs liver monitoring protocol. Develop REMS proposal (Risk Evaluation Mitigation Strategy).
• Reasoning: Shows regulatory solution beyond just warning—proactive risk management that could allow continued marketing.

Hour 18-20:

• Action: Engage top 5 institutional investors privately (BlackRock, Vanguard, etc.) under NDA. Explain situation and planned response.
• Reasoning: Prevents surprise selling panic. Large investors value transparency and will support "do the right thing" narrative if given advance notice.

Hour 20-22:

• Action: Prepare comprehensive board deck: (1) medical facts, (2) legal obligations, (3) scenario analysis, (4) recommended resolution for immediate disclosure, (5) draft communications.
• Reasoning: Board needs decision-grade information. Providing a clear resolution prevents paralysis.

Hour 22-24:

• Action: Conduct mock Q&A session with crisis PR firm. Prepare for hostile questions: "Why was this missed?" "How many died?" Draft employee talking points.
• Reasoning: Ensures consistent, confident messaging. Employees need guidance to avoid speculation.

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HOURS 24-36: EXECUTION & PRE-POSITIONING

Hour 24-26:

• Action: Submit formal FDA 15-day alert notification electronically. Include executive summary, data package, and request for expedited label review meeting within 14 days.
• Reasoning: Meets legal requirement. Puts company in driver's seat of narrative.

Hour 26-28:

• Action: Email all board members final board packet with "Urgent: Review Required" header. Include written CEO recommendation for immediate disclosure.
• Reasoning: Gives directors time to digest before meeting, reducing reactive decision-making.

Hour 28-30:

• Action: Brief major pharmacy benefit managers (Express Scripts, CVS Caremark) and largest hospital systems under NDA. Offer medical liaison support.
• Reasoning: Prevents abrupt formulary removals. Clinical partners will appreciate advance notice and may defend company publicly.

Hour 30-32:

• Action: Finalize "Dear Healthcare Professional" letter (FDA-approved language) and patient medication guide. Translate into Spanish and top 5 other languages.
• Reasoning: Ensures 4 million patients receive understandable risk information. Reduces language barrier liability.

Hour 32-34:

• Action: Prepare employee all-hands meeting script. Emphasize company values, patient commitment, and zero tolerance for retaliation against whistleblowers.
• Reasoning: Maintains morale and prevents internal leaks. Employees are first line of defense for reputation.

Hour 34-36:

• Action: Draft press release for after-market-hours distribution. Lead with "Proactive Safety Enhancement" not "Drug Warning." Include REMS program details.
• Reasoning: Frames narrative as responsible stewardship, not crisis. After-hours release gives journalists time to digest.

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HOURS 36-48: BOARD DECISION & PUBLIC DISCLOSURE

Hour 36-38:

• Action: EMERGENCY BOARD MEETING (move up from scheduled). Present for 60 minutes, then vote. No discussion of "waiting"—only how to disclose.
• Reasoning: Structured decisiveness. "Waiting" is off the table as it violates federal law. Board must formally approve disclosure to protect themselves.

Hour 38-40:

• Action: Immediately upon board approval: (1) file 8-K with SEC disclosing material event, (2) upload FDA safety report publicly, (3) activate crisis website and hotline, (4) distribute Dear Healthcare Professional letter via email/fax to 800,000 prescribers.
• Reasoning: Simultaneous disclosure to all stakeholders prevents selective disclosure claims. SEC filing is legally required within 4 business days of board decision.

Hour 40-42:

• Action: CEO hosts employee town hall (video conference). CMO hosts separate medical affairs call for sales reps. HR sends FAQ to all staff.
• Reasoning: Employees hear directly from leadership, reducing rumor mill. Medical staff need clinical depth to answer physician questions.

Hour 42-44:

• Action: Issue press release via wire service. CEO does exclusive interview with Wall Street Journal for next-day story. CMO appears on CNBC Mad Money at 6pm ET.
• Reasoning: Controlled media penetration. WSJ credibility with investors; CNBC reaches retail shareholders. Shows transparency.

Hour 44-46:

• Action: Activate medical information call center (100+ nurses). Send patient email blast to registered users. Post FDA submission documents on website.
• Reasoning: Direct patient communication bypasses media distortion. Demonstrates patient-first approach.

Hour 46-48:

• Action: Prepare for earnings call: draft opening statement addressing issue, prepare Q&A document for analysts, brief sell-side analysts privately. Establish 24/7 monitoring war room for next 72 hours.
• Reasoning: Can't ignore issue on earnings call—must address head-on. Pre-briefing analysts prevents shock questions.

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POST-48: EARNINGS CALL & BEYOND

72 Hours (Earnings Call):

• CEO opens with 3-minute direct statement on safety action
• Reiterate commitment to transparency
• Announce enhanced pharmacovigilance program ($50M annual investment)
• Confirm no change to revenue guidance (REMS allows continued access)

Ongoing:

• Weekly FDA meetings on label update
• Monthly public safety updates
• Quarterly board reviews of patient outcomes
• Annual independent audit of safety culture

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REASONING SUMMARY BY STAKEHOLDER

Legal Liability: Immediate disclosure creates "good faith" defense under FDA regulations, reducing criminal exposure from 10 years (felony) to civil penalties. Concealment triggers securities fraud (SEC), product liability (punitive damages multiplier), and potential RICO. Transparency is the lowest legal risk path.

Ethical Obligations: The moment research team flagged the signal, the company had positive knowledge. The "15-day clock" started. Waiting 6 months means 4 million patients continue without informed consent, likely causing 50+ preventable liver failure deaths. Ethics and law converge on immediate action.

Financial Implications: While stock drops 30-40% initially, history shows recovery within 12-18 months for companies that act decisively (e.g., J&J Tylenol recall). Concealment that leads to deaths triggers 70-90% drops and bankruptcy (e.g., Purdue). Short-term pain preserves long-term enterprise value.

PR Strategy: Proactive disclosure frames company as "industry leader in safety transparency." Reactive leak creates "cover-up" narrative. The 6-month "wait" is a fiction—leaks are inevitable with 50+ employees aware. Control the narrative or it controls you.

Patient Safety: 1/8,000 risk means 500 of current 4M patients will develop liver failure in 5 years without intervention. Immediate Dear HCP letter enables monitoring that can reduce risk by 80% (regular liver function tests). Direct communication saves lives.

Employee Morale: Staff joined to help patients, not harm them. Transparent action aligns with mission. Concealment creates cognitive dissonance and whistleblower risk. Doing the right thing is the best retention tool.

Regulatory Relationships: FDA respects companies that self-report and propose solutions. Voluntary REMS programs often avoid mandatory withdrawals. Partnership, not adversarial relationship, ensures continued market access.

Final Calculation: The cost of transparency is a $1.2B market cap loss. The cost of concealment is $5B+ in liability, criminal indictments, 500 patient deaths, and corporate destruction. The choice is clear.