The ongoing clash over controversial consumer protection decisions and their implications for Michigan’s insulin market took a significant turn as the state Supreme Court gears up to reconsider past rulings that have arguably provided a shield for pharmaceutical companies against investigations into business practices. The Michigan Attorney General’s team presented arguments to the Supreme Court in an attempt to overturn two rulings from 1999 and 2007, which have since been employed by Eli Lilly and Company to thwart state inquiries into their insulin pricing strategies.
Hinging on these precedents, the Smith v. Globe Life Ins. Co. and Liss v. Lewiston-Richards, Inc. cases, Eli Lilly asserts that the Michigan Consumer Protection Act (MCPA) does not apply to their sale of insulin. However, according to a statement obtained by Michigan.gov, the Attorney General's office argues that these decisions do not align with a plain reading of the law and err by extending a narrow exemption within the MCPA to block state scrutiny over alleged unfair business practices, regardless of allegations about how these businesses operate.
Michigan Attorney General Dana Nessel emphasized the limitations faced by her department due to the Smith and Liss rulings, notably their impotence in using the MCPA against deceptive business agents shielded by professional or occupational licenses. “This misapplication of the law has left countless consumers without proper recourse against predatory practices, like the surging prices for essential medication. Reversing these decisions would not only enable us to investigate allegations of insulin price gouging but also restore the MCPA’s power to protect Michigan consumers across the marketplace. It is my hope that the Court rules in favor of the many Michiganders who fall victim to deceptive commercial operators.” Nessel said. Reversal of these decisions could potentially reinvigorate the state’s authority to protect Michigan consumers from deception and price gouging across multiple sectors, including the purchasing of everyday items like automobiles, home repairs, telecommunications services, and prescription medicines, as noted by Michigan.gov report.
In a procedural history mired by legal roadblocks, the state's top legal officer, Nessel launched an investigation into Eli Lilly's pricing of insulin back in January 2022, using the MCPA as a basis for probing various aspects of the pharmaceutical giant's pricing mechanisms. Eli Lilly leveraged the past decisions to secure an order stating that the MCPA does not govern its insulin sales, thereby stalling the state's investigative efforts. Walking through the steps of litigation, Ingham Circuit Court Judge Wanda M. Stokes, in July of 2022, granted Eli Lilly’s motion for summary disposition, citing that the Smith and Liss decisions preclude the application of the MCPA to their sale of insulin, as per the Michigan.gov report.
With the Michigan Supreme Court now poised to review these landmark cases, a potential reversal could redefine the landscape of consumer protection within the state. The arguments delineated before the Court were not about Eli Lilly's direct violation of the MCPA, but rather the authority of the Attorney General to carry out investigations under the MCPA when a company like Eli Lilly, while authorized by the FDA to sell insulin medications, is not subject to FDA regulation regarding the pricing of those medications.
