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ECJ Allows Dominant Pharmaceutical Manufacturers Refusal To Supply In Order To Defend Legitimate Commercial Interests

Client Alert | 2 min read | 09.16.08

While in 2005 the European Court of Justice ("ECJ") (Case C-53/03 - Syfait and others v. GlaxoSmithKline) refused to rule on the application of Art. 82 EC to supply quota systems because the referring Greek competition authority was not found to be a court within the meaning of Art. 234 EC, the ECJ held today (Joined Cases C-468/06 to C-478/06 - Sot. Lelos and others v. GlaxoSmithKline) that a pharmaceutical company would not abuse its dominant position, if "the refusal […] to supply wholesalers involved in parallel exports constitutes a reasonable and proportionate measure in relation to the threat that those exports represent to its legitimate commercial interests […]" (para. 70). Should a dominant pharmaceutical company, however, refuse to meet "ordinary" orders from a wholesaler, it is abusing its dominant position (para. 77). According to the ECJ, the crucial factors to determine whether a wholesaler is ordering "ordinary" orders are:

  • the size of the orders in relation to the requirement of the market of a given Member State and
  • the previous business relationship with a given wholesaler (para. 73).

Accordingly, in light of the specifics of the regulated pharmaceutical markets in Europe, the ECJ left the door open for quota systems in the pharmaceutical sector. It is interesting to note that today's ruling takes a middle course between Advocate General Jacobs' view to largely allow a refusal to supply based on objective market factors (cf. opinion delivered for case C-53/03 GlaxoSmithKline), and Advocate General Ruiz-Jarabo Colomer's view that dominant pharmaceutical manufacturers have to provide conclusive evidence that the refusal to supply was required by the market situation (opinion delivered in this case). In any event, the judgment is likely to have ramifications for the whole pharmaceutical sector where prices are directly or indirectly controlled by governments.

Please find below the references to today's decision and the diverging opinions of the Advocate Generals.

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Client Alert | 5 min read | 12.12.25

Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument....

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