Ethical Dilemma with Stakeholders

Action Plan for the Next 48 Hours
Priorities: Patient safety, ethical compliance, regulatory transparency, and mitigating financial/PR fallout.

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Hours 0–6: Assemble Crisis Team & Confirm Data

• Hour 0–2:

  • Assemble cross-functional crisis team: Legal, Medical/Clinical, Regulatory Affairs, PR, Finance, and Board Secretary.
  • Immediate tasks:
    • Medical team: Confirm linkage between drug and liver failure (review internal data, patient reports, and external literature).
    • Legal team: Assess liability risks of disclosure vs. non-disclosure.
    • Regulatory team: Identify expedited FDA reporting pathways (e.g., FDA’s Adverse Event Reporting System [FAERS] for urgent safety updates).

• Hour 2–6:

  • Medical team: Validate incidence rate (1/8,000 over 5 years) and confirm causality (e.g., biopsy results, exclusion of confounding factors).
  • Regulatory team: Contact FDA via emergency channel to notify them of findings and request guidance on labeling updates.
  • PR team: Draft internal memo to employees (to be sent after board approval) and prepare external messaging (press release, HCP letters).

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Hours 6–12: Legal/Regulatory Strategy & Initial Outreach

• Hour 6–8:

  • Legal team: Determine if delayed reporting violates FDA regulations (e.g., 15-day alert for serious adverse events). If so, initiate expedited reporting immediately.
  • Regulatory team: File preliminary FAERS report with available data; commit to submitting full analysis within 72 hours.

• Hour 8–12:

  • PR team: Finalize external messaging (e.g., “Voluntary Label Update” emphasizing patient safety) and prepare Q&A for earnings call.
  • Finance team: Model stock impact (40% drop) vs. cost of litigation if delayed disclosure is later deemed negligent.
  • CEO: Brief board chair informally; emphasize ethical duty and regulatory risk of waiting.

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Hours 12–24: Board Preparation & Preemptive Outreach

• Hour 12–16:

  • Medical/Regulatory: Draft board report with:
    • Data on liver failure cases (absolute risk, patient demographics).
    • FDA’s likely stance (e.g., requirement to update label within 30 days).
    • Ethical obligation to disclose under FDCA’s “changes being effected” (CBE) pathway.
  • Finance: Propose mitigation strategies (e.g., patient assistance program, liver monitoring subsidies).

• Hour 16–20:

  • CEO: Meet individually with the three dissenting board members. Share:
    • Legal risk of waiting (potential shareholder lawsuits for withholding material information).
    • Ethical breach if patients suffer avoidable harm.
    • Precedent: Competitors who delayed disclosures faced 60%+ stock drops + fines.

• Hour 20–24:

  • PR team: Pre-brief key journalists (e.g., Wall Street Journal health reporter) under embargo to control narrative.
  • Internal comms: Send employee memo: “We prioritize patient safety; updates coming post-board review.”

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Hours 24–48: Board Meeting & Execution

• Hour 24–36:

  • Board meeting:
    • Presentation: Focus on patient safety, FDA expectations, and long-term financial stability (transparency preserves trust).
    • Vote: Push for immediate disclosure. If deadlocked, invoke CEO authority to act in best interest of public health.

• Hour 36–48:

  • If board approves disclosure:

    • Hour 36–40: Issue press release, update drug label, and send “Dear Healthcare Provider” letters.
    • Hour 40–44: File formal FDA report (CBE-0) with full data; schedule follow-up meeting with FDA.
    • Hour 44–48: Prepare earnings call script (emphasize proactive safety measures, commitment to transparency).

  • If board delays:

    • Document dissent: Legal team notes board’s refusal to act, creating liability shield for CEO.
    • Prepare for leaks: Preemptively release data to FDA and issue “voluntary update” to limit reputational damage.

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Key Rationale

1. Patient Safety: Ethical obligation to warn 4 million patients outweighs short-term stock impact.
2. Regulatory Risk: FDA expects timely reporting; delays could trigger fines (up to $500k per violation) or forced recalls.
3. Financial Mitigation: Proactive disclosure allows control of narrative; delayed disclosure risks class-action lawsuits (e.g., In re Vioxx).
4. Board Dynamics: Pre-meetings with dissenters reduce surprise; focus on fiduciary duty to stakeholders, not short-term stock price.

Outcome: If disclosed, stock drops 40% but stabilizes as trust is rebuilt. If hidden, risk 10x larger drop + criminal liability (e.g., DOJ investigation).