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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 | 3 min read | 11.21.25

A Sign of What’s to Come? Court Dismisses FCA Retaliation Complaint Based on Alleged Discriminatory Use of Federal Funding

On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future....

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