Thursday, January 07, 2016
It is a CEO's nightmare to have his company singled out for a product defect that isn't true. That is what happened to pharmaceutical manufacturer Regeneron. Because of faulty reporting in a Federal database of side effects from its new drug, Praluent, investors rushed to dump the stock. It turns out that a suicide related to its medication was reported over and over again providing the impression that the drug's side effects could be lethal. The Food and Drug Administration tried to clear the situation up but the damage was done. There is no way to sue the FDA for the misreporting nor, for that matter, those who noted the incident in good faith. Now the CEO has to rebuild credibility for his drug and boost sales. It is a tough PR challenge made worse by the way that it happened.