A tiny southern Spanish town is taking on the German pharmaceutical company that developed thalidomide in solidarity with Spanish people who suffered birth defects as a result of their mothers taking the drug.

Starting this week, Olvera – population 8,500 – has declared Grünenthal non grata.

Employees of Grünenthal will no longer be welcomed in the town and local doctors have been urged to swap out the company’s medications for generic brands when possible, said United Left town councillor Jacobo Camarero.

About 3,000 people in Spain are believed to have suffered severe birth defects after their mothers took thalidomide, prescribed by Spanish doctors five decades ago to combat morning sickness during pregnancy.

While no victims live in Olvera, the town decided to take action in October after a court in Madrid overturned a 2013 ruling ordering Grünenthal to compensate Spanish victims according to the severity of their injuries. “The first thing that occurred to me was to present a proposal – the harshest one possible – to offer solidarity to the victims in Spain and point a finger at those responsible,” said Camarero. The town’s declaration will hold until Spanish victims receive compensation, he added.

Grünenthal has previously shied away from legal liability, bolstered by a trial that was settled out of court in 1970. A recent report by the Guardian, based on documents from the UK’s Thalidomide Trust, suggested that political interference led to the trial being aborted.

Only two dozen of the thousands affected by thalidomide in Spain have ever been compensated. Unlike many other countries in Europe, where governments have provided compensation, Spain has never created a fund for victims. For most, attempts to secure funding from Grünenthal have been futile; victims said they were unable to meet the criteria of presenting the bottle of medication taken by their mother decades ago and, at times, the doctor’s prescription.

In a written statement to the Guardian on Monday, Grünenthal noted that Spanish victims could apply to the independent Contergan Foundation, established by the German parliament, for compensation. The company noted that it was unaware of how the foundation makes decisions on compensation, but said approximately 10 Spaniards have been compensated.

“We want the same treatment as Britons, Germans, French and Swiss. We’re not asking for anything better or worse, just equal,” said Rafael Basterrechea, whose limbs were foreshortened, particularly his left arm, after his mother was prescribed thalidomide in 1965, four years after the drug had been pulled off shelves in Britain and Germany. Basterrechea also suffers from glaucoma, as well as kidney, liver and pancreas damage.

He’s never received any kind of compensation from the company, while the Spanish government – who he argues allowed its citizens to be used as “guinea pigs” – has never recognised him or any others in Spain as victims of thalidomide.

Part of their struggle lies in the many unanswered questions about the use of thalidomide in Spain, which took place during the dictatorship of General Francisco Franco. Admission about the use of the drug has been slow in coming, with the country’s health minister taking until 2007 to confirm that the drug had been sold in the country between 1957 and 1961.

While the admission was welcome, the dates contradict the claims of thalidomide victims. “We’ve seen thalidomide listed in unofficial catalogs as late as 1975,” said Basterrechea. Discrepancies like these have muddied the debate as to the quantity and timeline of thalidomide sold in Spain, making it impossible to accurately pinpoint how many were affected.

The struggle by Spanish campaigners to piece together the history of the drug in the country is a race against time; of the estimated 3,000 victims, campaigners say a third of them have died.

Spain’s economic crisis has also exacerbated the need for compensation, said Basterrechea, as austerity measures take aim at crucial social and healthcare services in the face of soaring unemployment. “Of the few victims we know who were working, about half of them lost their jobs,” he said. “It’s been a disaster, leaving people desperate, living off social benefits or depending on soup kitchens to eat.”

In recent months, Basterrechea and other victims have stepped up their battle to obtain compensation. They appealed October’s court ruling and launched a multi-language online petition, in the hope of rallying international support for their cause.

The response has so far been promising, said Jose Riquelme, founder of Avite, a group that represents the Spanish victims of thalidomide. Born without his right foot, the 52-year-old has spent the past 35 years fighting for compensation.

Encouraged by the actions of Olvera, Avite recently sent a letter detailing the town’s action to the country’s association of municipalities, urging others to declare Grünenthal unwelcome. And after nearly half a century of near-silence on the issue, Avite has been invited to meet officials from the country’s health ministry later this month.

For the first time in his decades-long battle, Riquelme feels that doors are starting to open. “My intuition is that a happy ending might be close,” he said. “But it’s just a feeling. I can’t tell you why.”