The Michigan Supreme Court has ruled that the state attorney general may proceed with an investigation into Eli Lilly's insulin pricing practices, removing a legal barrier that had blocked the inquiry for four years. The 4-3 decision in Attorney General v. Eli Lilly and Company was issued at the end of July.
The ruling does not find that Eli Lilly did anything wrong. It resolves a procedural question about whether the state can investigate at all, and the distinction is central to reading this story accurately.
For the roughly 1.08 million Michigan residents living with diabetes, according to American Diabetes Association estimates cited by CBS Detroit, the practical significance is not an immediate change at the pharmacy counter. It is that a state investigation into how insulin is priced can now actually happen, and that the same reasoning applies to other regulated industries residents deal with every day.
A Procedural Ruling, Not a Finding of Wrongdoing
Attorney General Dana Nessel opened the investigation in January 2022, alleging that Eli Lilly had artificially inflated insulin prices and seeking to examine price disparities between branded insulin and its generic equivalent. State filings alleged grossly excessive pricing that pushed some patients to ration or forgo the drug.
Those are allegations made by the state in litigation. No court has ruled on whether the company's pricing violated Michigan law.
Eli Lilly fought the subpoenas, arguing that an exemption in the Michigan Consumer Protection Act shielded its conduct because the company is already regulated by the Food and Drug Administration and the Michigan Board of Pharmacy. An Ingham County judge sided with the company, and the Court of Appeals upheld that decision because it was bound by existing precedent. The state's response was that neither agency regulates drug pricing.
In a statement reported by Michigan Advance, a Lilly spokesperson said the company was disappointed that a divided court set aside longstanding precedent, and pointed to what it described as a strong record of insulin affordability programs.
Two Decades of Precedent Undone in a 4-3 Split
The legal question turned on a single clause. Section 4(1)(a) of the Michigan Consumer Protection Act exempts conduct specifically authorized under laws administered by a regulatory board or officer. Two earlier decisions, Smith v. Globe Life Insurance Co. from 1999 and Liss v. Lewiston-Richards Inc. from 2007, read that exemption broadly enough that, as legal analysts noted, a business operating in any regulated industry was largely shielded from the act.
The majority overruled both. Writing for the court, Justice Noah Hood concluded that by misconstruing a narrow exemption and ignoring the statute's plain language and purpose, "this court has disrupted the reliance interest for consumer protections," according to The Detroit News. He was joined by Chief Justice Megan Cavanagh and Justices Elizabeth Welch and Kimberly Thomas.
Three justices dissented. Justice Kyra Harris Bolden, joined by Justices Brian Zahra and Richard Bernstein, wrote that the attorney general lacked standing because the office had not identified any unfair, unconscionable or deceptive practice amounting to an actionable claim, leaving the court without a live controversy in which to revisit the earlier decisions.
Nessel said in a statement from her office that "the Michigan Consumer Protection Act was once the envy of consumer protection efforts" nationally, and that the state can claim that standing again with the two decisions off the books.
Michigan's Diabetes Patients and the Cost Question
Nothing about this decision changes what any Michigan resident pays for insulin this month. Prices, coverage and copays are unchanged.
What it does change is the possibility of state-level scrutiny of pricing conduct in an area where federal regulators approve products but do not set prices. Patients who ration insulin because of cost face real medical consequences, including diabetic ketoacidosis, which can be life-threatening. Anyone stretching doses to make a supply last should talk with a prescriber or pharmacist rather than continuing quietly, because there are usually options.
Those options include manufacturer patient assistance and savings programs, generic or biosimilar insulins, switching to a different insulin covered at a lower tier, community health centers with sliding-scale pricing, and for Medicare beneficiaries the annual out-of-pocket cap on covered Part D drugs. A pharmacist can often identify a lower-cost path in a single conversation. Do not change or stop insulin without medical guidance.
The dispute also drew business opposition. Groups representing regulated industries have warned the ruling could broaden litigation exposure, and Republican legislators have introduced a bill aimed at shielding regulated businesses from suits of this kind.
Next Steps in the Courts and the Legislature
The case now returns to the lower courts. The Detroit News reported that the Supreme Court sent it back to the Michigan Court of Appeals for expedited consideration under the new interpretation of the act. The question there will be whether the attorney general's office may use its investigative authority to examine Lilly's pricing, not whether the company has been found responsible for anything.
If the investigation proceeds, subpoenas and document review would follow. Any enforcement action, settlement, or finding would come well after that, and no timeline has been announced.
Michigan lawmakers may also act. Legislation to codify a regulatory compliance exemption has been introduced, which would effectively restore some version of the prior shield through statute rather than case law. The outcome there will shape whether this ruling proves durable.
Whether any of this translates into something measurable for insulin costs in Michigan remains, at this stage, unresolved. Patients should watch for court scheduling and legislative action this fall, though neither will change coverage or pricing on its own. Reporting by STAT and Michigan outlets continues to track the case.
Frequently Asked Questions
Did the court find that Eli Lilly overcharged for insulin? No. The ruling addressed whether the attorney general may investigate. It made no finding about the company's pricing conduct.
What did the court actually decide? In a 4-3 decision, it overruled two prior cases that had broadly interpreted an exemption in the Michigan Consumer Protection Act, and sent the case back to a lower court for further proceedings.
Does this change what I pay for insulin in Michigan? No. Prices, insurance coverage and copays are unaffected by this decision.
What did the state allege? That Eli Lilly artificially inflated insulin prices, including disparities between branded and generic versions, and that the resulting costs led some patients to ration or forgo the drug. These are allegations, not established findings.
What should I do if I am rationing insulin because of cost? Talk to your prescriber or pharmacist before changing anything. Manufacturer assistance programs, biosimilar or generic options, formulary alternatives and community health centers may reduce costs. Do not stop or stretch doses on your own.
Why did three justices disagree? The dissent argued that the attorney general's office had not identified a specific unfair or deceptive practice, leaving it without standing and the court without a genuine controversy to decide.
What happens next? The case returns to a lower court under the new interpretation. Michigan lawmakers may also consider legislation to write the exemption into statute.
