Ethical Dilemma with Stakeholders

HOUR 0-4: EMERGENCY CONTAINMENT & LEGAL VERIFICATION

Hour 0-1: Immediate Crisis Team Activation

• Convene emergency meeting with Chief Medical Officer, Chief Compliance Officer, General Counsel, Head of Pharmacovigilance, and Chief Communications Officer (in-person only, no virtual/paper trail on initial deliberations)
• Reasoning: Attorney-client privilege protection is critical. Initial discussions must be protected to ensure frank legal advice. The CMO provides medical context; Compliance ensures we understand regulatory triggers.

Hour 1-2: Trading Blackout Implementation

• Issue immediate "blackout notice" to all board members, C-suite, and employees with material non-public information (MNPI)
• Suspend all stock buyback programs and executive equity transactions
• Reasoning: Securities law violation if anyone trades while knowing this material information. Board members suggesting "waiting" creates massive insider trading liability exposure. This protects individuals from criminal liability and the company from derivative suits.

Hour 2-4: Regulatory Reality Check

• Challenge the legal team's "6-month" claim with specialized regulatory counsel. Verify FDA Form 3500A (MedWatch) requirements: 15-day Alert Reports are required for serious, unexpected adverse events, not 6 months.
• Confirm that while label changes take months, safety reporting does not.
• Reasoning: The legal team's timeline likely conflates label updates with adverse event reporting. Waiting 6 months to report serious liver failure violates 21 CFR 314.80. This is a binary compliance issue—failure to report within 15 days is a criminal violation under FD&C Act, not just civil liability.

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HOUR 4-12: MEDICAL & OPERATIONAL ASSESSMENT

Hour 4-6: Risk Quantification

• Calculate absolute patient impact: 4M patients × (1/8,000 risk) = ~500 potential liver failure cases, with potential mortality of 30-50% without transplant = 150-250 preventable deaths.
• Analyze patient subpopulations (age, liver enzymes, alcohol use, drug interactions) to identify higher-risk groups.
• Reasoning: 1 in 8,000 sounds rare statistically, but at population scale, this is a mass casualty event. Fiduciary duty requires quantifying the actual human and financial exposure. This data drives the urgency of communication.

Hour 6-8: Regulatory Notification (Preliminary)

• Draft expedited safety report for FDA (and EMA/PMDA if applicable)
• Notify FDA Division Director by phone (professional courtesy before formal submission)
• Reasoning: Proactive regulatory engagement builds trust and demonstrates good faith. Phone notification allows FDA to prepare for the formal submission and potentially coordinate with us on risk mitigation strategies rather than adversarial enforcement.

Hour 8-12: Communication Strategy Framework

• Draft "Dear Healthcare Provider" letter for immediate distribution post-board approval
• Prepare patient notification strategy (pharmacy inserts, patient portal alerts, toll-free hotline)
• Draft holding statement for media inquiries
• Reasoning: Healthcare providers are the frontline for patient safety. They need immediate warning to monitor liver enzymes and consider alternatives. Patient communication must be direct, not buried in legal disclaimers—transparency preserves long-term trust.

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HOUR 12-24: BOARD PREPARATION & FIDUCIARY EDUCATION

Hour 12-16: Board Education Package

• Prepare memo for the three dissenting board members clarifying:
  • Legal: 15-day reporting is mandatory; "waiting for data" constitutes criminal misbranding and conspiracy
  • Financial: Cover-up discovery (inevitable in pharmacovigilance databases) destroys the company permanently (see Vioxx $4.85B settlement vs. immediate disclosure hit)
  • Ethical: 150-250 preventable deaths vs. stock price
• Include precedent analysis: Tylenol recall (Johnson & Johnson) recovered stronger; opioid concealment destroyed Purdue Pharma.
• Reasoning: The board members likely don't understand that "waiting" isn't a legal option—it's a choice between controlled disclosure now versus catastrophic discovery later. Fiduciary duty requires compliance with law, not just profit maximization.

Hour 16-20: Financial Modeling

• Model three scenarios:
  1. Immediate disclosure: 40% stock drop, $800M market cap loss, potential 30% revenue decline, litigation reserve $500M
  2. Delayed disclosure (6 months): Continued revenue $1B, but when discovered: 70% stock drop, criminal prosecution, potential corporate death penalty (exclusion from federal programs), personal liability for directors
  3. Middle path: Immediate regulatory reporting with controlled commercial wind-down
• Reasoning: Directors need to see that "waiting" doesn't save the company—it destroys it. The math must show that regulatory violation transforms this from a product liability issue into a criminal enterprise.

Hour 20-24: Earnings Call Preparation

• Draft 8-K material event disclosure for SEC filing before earnings call
• Prepare script acknowledging safety signal, regulatory reporting, and patient safety priority
• Notify major institutional investors (analyst call 30 minutes before public earnings call)
• Reasoning: SEC Rule 10b-5 requires disclosure of material information. A $2B drug with safety issues is material. Staggered disclosure (regulators → major investors → public) manages market volatility while complying with selective disclosure rules (Reg FD).

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HOUR 24-48: BOARD MEETING EXECUTION & PUBLIC READINESS

Hour 24-30: Mock Board Presentation

• Rehearse presentation with legal and medical teams
• Prepare for hostile questions from the three dissenting directors
• Draft board resolution authorizing immediate regulatory reporting and public disclosure
• Reasoning: The board meeting cannot end without a unified decision. Dissenting directors must be either convinced or overruled (with their dissent noted in minutes for their own legal protection). A recorded vote creates accountability.

Hour 30-36: Regulatory Submission Finalization

• Finalize FDA Form 3500A submission
• Submit to EMA and other relevant agencies simultaneously
• Upload to FAERS (FDA Adverse Event Reporting System)
• Reasoning: Multi-agency simultaneous submission prevents regulatory arbitrage and demonstrates global compliance commitment. This starts the clock on regulatory review and protects against claims of hiding data.

Hour 36-42: Stakeholder Mobilization

• Brief sales force (under strict confidentiality until public announcement)
• Activate medical affairs team to field physician inquiries
• Prepare customer service scripts and expand hotline capacity
• Notify pharmacy benefit managers and major payers
• Reasoning: Sales force must know before they hear it on CNBC—employee trust is paramount. Payers need lead time to adjust formularies and prior authorization criteria to protect existing patients.

Hour 42-48: Final Board Meeting

• Present: Medical data, regulatory obligations, financial models, communications plan
• Request unanimous vote on:
  1. Immediate public disclosure (within 24 hours)
  2. Voluntary "Dear Doctor" letter
  3. Enhanced monitoring program for existing patients
  4. CEO statement taking personal responsibility
• Reasoning: Unanimity is crucial. Any public dissent tank the stock further and invite derivative litigation. If directors still resist, note their dissent and proceed—protecting the company requires going forward even without unanimity, but the record must show they were overruled on legal advice, not ignored.

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POST-48 HOUR EARNINGS CALL PROTOCOL

Hour 72 (Earnings Call):

• Lead with patient safety, not financials
• State: "We have identified a rare but serious safety signal and have immediately reported to regulators as required by law. Patient safety is non-negotiable."
• Provide specific guidance on monitoring (liver enzyme testing every 3 months)
• Announce immediate halt to direct-to-consumer advertising
• Reasoning: Leading with ethics rebuilds trust faster than defensive legal positioning. Providing concrete medical guidance (liver monitoring) transforms the narrative from "company caught hiding danger" to "proactive medical leadership."

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STRATEGIC RATIONALE SUMMARY

Legal Liability: The 6-month "wait" suggested by counsel is legally indefensible. FDA regulations require 15-day expedited reports for serious unexpected adverse events. Concealment converts strict liability (product defect) into intentional tort and criminal fraud, exposing the company to treble damages and exclusion from Medicare/Medicaid (the "corporate death penalty").

Ethical Obligation: With 4 million patients, the 1/8,000 incidence rate projects to 500 liver failures. Every day of delay statistically condemns approximately 0.27 patients to preventable organ failure (assuming linear risk distribution). The categorical imperative demands immediate action.

Financial Optimization: Counterintuitively, immediate disclosure preserves enterprise value. Vioxx's concealment cost Merck $4.85 billion; J&J's Tylenol recall is a business school case in value preservation through ethical leadership. The 40% drop is recoverable; criminal prosecution is not.

Regulatory Relationship: Proactive reporting generates "good faith" credit with FDA, potentially enabling a controlled risk mitigation strategy (enhanced monitoring) rather than immediate withdrawal. Concealment guarantees adversarial enforcement.

Employee Morale: Pharmaceutical employees are mission-driven. Asking them to sell a product while concealing lethal side effects destroys culture permanently. Transparency preserves the organization's ethical foundation.

Final Decision: Proceed with disclosure at Hour 48 regardless of board unanimity. Resignation is preferable to presiding over a cover-up that kills patients and destroys the company.