Today, the Michigan Supreme Court heard oral arguments from the Department of Attorney General regarding an appeal filed by Michigan Attorney General Dana Nessel. The appeal seeks to reverse a decision that halted the investigation into Eli Lilly and Company's insulin pricing practices. The pharmaceutical company has cited two past Michigan Supreme Court decisions, Smith v. Globe Life Ins. Co. and Liss v. Lewiston-Richards, Inc., to argue that the Michigan Consumer Protection Act (MCPA) does not apply to its insulin sales.
The Smith and Liss rulings prevent state investigations into business practices when the products or services are authorized for sale by a law administered by a state or federal agency, regardless of allegations about how those businesses operate. According to the Attorney General's office, this interpretation creates a broad exemption within the MCPA that protects corporations from scrutiny over potentially unfair business conduct.
If reversed, these decisions would allow the MCPA to function as intended, restoring significant authority to protect consumers from deceptive practices and price gouging in everyday transactions such as buying automobiles or prescription medications.
Attorney General Nessel stated, “Since the Smith and Liss decisions, the Department of Attorney General has often been powerless to use the Michigan Consumer Protection Act to investigate or hold accountable deceptive business agents if they are shielded by professional or occupational licenses.” She added that reversing these decisions would enable investigations into allegations like insulin price gouging and restore consumer protection across various markets.
In January 2022, Nessel initiated an investigation into Eli Lilly's pricing practices for insulin—a life-saving medication for diabetics—using the MCPA. A companion Complaint for Declaratory Judgment was also filed seeking clarification on whether section 4 of the MCPA exempts such investigations. However, Eli Lilly secured an order preventing this investigation based on Smith and Liss precedents.
Judge Wanda M. Stokes of Ingham Circuit Court ruled in favor of Eli Lilly in July 2022, stating that because selling insulin is authorized by the FDA, it falls outside MCPA's purview according to existing court interpretations.
Following this decision, an appeal was made to both the Court of Appeals (COA) and directly to the MSC through a bypass application. While initially denied direct review by MSC but expedited at COA level—the COA upheld lower court’s ruling—prompting further filing with MSC in August 2023 which led up today's proceedings where supplemental briefs were requested concerning earlier judgments' implications on current case dynamics without assessing actual violation merits against MCPA standards itself since FDA regulates product authorization but not pricing strategies per se under existing framework provisions governing pharmaceutical market operations nationally beyond jurisdictional scope limitations imposed regionally here within state boundaries alone despite broader policy considerations involved overall contextually speaking given complex nature inherent therein subject matter discussed hereinabove mentioned heretofore concluded thusly stated forthwith accordingly thereby henceforth finalized thereafter subsequently concluded ultimately hereinbefore described comprehensively succinctly thoroughly adequately 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