Michigan Attorney General Dana Nessel plans to investigate Eli Lilly's insulin pricing but will have to first overturn Michigan court precedent in order to push forward with the probe.
The investigation into sky-high insulin prices is being blocked by Michigan Supreme Court opinions that prohibit the Attorney General's Office from investigating an entity under the Michigan Consumer Protection Act if that entity is already regulated by a state or federal agency.
In Eli Lilly's case, the entity is regulated by both the Federal Drug Administration and the Michigan Board of Pharmacy — neither of which have much authority over pricing.
The average out-of-pocket cost for a vial of insulin is close to $100 and people with diabetes — about 11.2% of the American adult population — have medical expenses 2.3 times higher than those without diabetes, Nessel said when announcing the investigation.
"We're not just going to sit on the sidelines while Michiganders struggle to pay for lifesaving medication," Nessel told reporters Thursday.
Lilly, Eli Lilly's diabetes branch, said Thursday it was "deeply disappointed" in Nessel's "false accusations and inaccurate claims" about its costs. The company countered that "multiple affordability solutions" made it possible for individuals to get their monthly insulin prescription for less than $35.
"Lilly welcomes systemic solutions and new public policies, such as copay caps on insulins like the one Gov. Gretchen Whitmer has proposed, which could bring much-needed relief to people who face higher out-of-pocket costs for their medications," the company said in a statement.
"Until actual reforms fill these gaps, Lilly remains firmly committed to providing affordability solutions to people who need them."
Whitmer touted the investigation Wednesday in her State of the State address, as well as separate action by the Michigan Legislature seeking to cap insulin at $50 a month.
Even with that support, Nessel noted that the inquiry into Eli Lilly's insulin pricing would be an uphill climb and involve clearing several hurdles in court before the investigation could actually begin.
In order to start an investigation under the Michigan Consumer Protection Act, Nessel's office must petition the court with a formal petition and court. Those were filed Tuesday in Ingham County Circuit Court.
Either the court or Eli Lilly could move to block the petition, in which case Nessel said her office is prepared to appeal. Her office is hopeful any dispute would occur at the frontend of the investigation, rather than at the conclusion of the investigation when potential litigation is filed.
"You can't win a case you never file," Nessel said of the hurdles ahead. "It's worth challenging these decisions because, quite honestly, we can't do worse. If we lose, we're in the exact position we are right now."
The limits placed on the Michigan Consumer Protection Act via Supreme Court decisions in 1999 and 2007 have long been a source of frustration for the attorney general's office, which is tasked with consumer protection, Nessel said.
As recently as last year, Nessel's office asked the Michigan Supreme Court to overturn the precedent set by the two cases, but the high court declined to revisit the issue.
If Nessel's office is successful, any court reversal of the earlier decisions will open the door for other investigations by her department that have so far been barred.
In other circumstances, the decisions have blocked Nessel's office from investigating under the Michigan Consumer Protection Act other regulated licensed industries such as nursing homes, construction companies or medical professionals.
The agency's hands were briefly untied early in the pandemic when Whitmer's later overturned executive orders created a brief window in which price gouging was considered a criminal offense, giving Nessel's office authority it didn't have before.
"COVID has really highlighted the fact that we need to have these tools to combat excessive pricing and gouging," Nessel said.
Legislation by Democrats in Congress — the Build Back Better Act — would cap insulin costs at $35 per month, but that bill is stalled in the Senate.
