Michigan High Court Changes Course in Eli Lilly Insulin Case Pricing

New Precedent Set by Michigan Supreme Court in Eli Lilly Insulin Pricing Case

The Michigan Supreme Court has recently overturned a longstanding legal interpretation that allowed drug companies to evade scrutiny regarding their pricing structures, particularly in a case involving Eli Lilly. This decision, reached on a narrow 4-3 vote, marks a significant shift in how the law is applied to businesses holding government licenses amidst growing concerns over insulin pricing.

The case traces back to an investigation launched by Michigan Attorney General Dana Nessel in 2022, which focused on Eli Lilly’s pricing practices for their Humalog insulin product. Nessel invoked the Michigan Consumer Protection Act (MCPA) as part of her inquiry. Historically, certain exemptions within the MCPA have been interpreted to protect businesses operating under government licenses, a stance supported by court rulings from 1999 and 2007.

Previously, Eli Lilly utilized this legal shield to effectively fend off subpoenas seeking to investigate their pricing strategies. However, the recent ruling indicates a new direction, which Attorney General Nessel has welcomed. In a video statement, she remarked on the implications of the ruling, stating, “If a business held any kind of license or occupational credential, they became untouchable. Even if their misconduct had nothing to do with the rules or laws that applied to their licensure.”

While the ruling is a favorable development for the Attorney General's office, it is important to note that, as of now, no formal allegations of wrongdoing have been made against Eli Lilly. This has led to dissenting opinions among justices. Notably, Justices Kyra Harris Bolden, David Bernstein, and David Viviano expressed their concerns over the decision, highlighting the absence of a specific controversy pertaining to the MCPA. Bolden, in her dissent, stated, “Without trying to argue a violation of the MCPA, there’s no actual controversy. Fundamental to obtaining declaratory relief on the parties’ rights and obligations under the MCPA is asserting that a violation of the MCPA may have occurred.”

The case will now return to the circuit court for further examination, potentially setting the stage for new developments in the accountability of drug pricing practices.