The Michigan Supreme Court issued a significant ruling on July 31, 2026, regarding the Attorney General's investigation into Eli Lilly and Company's pricing practices for insulin medications. The court found that the Attorney General had the right to pursue subpoenas related to potential violations of the Michigan Consumer Protection Act (MCPA). This decision is important for consumers as it may lead to greater scrutiny of pharmaceutical pricing practices in Michigan.
The case, titled Attorney General v. Eli Lilly and Company (Docket No. 165961), arose from allegations that Eli Lilly had artificially inflated the list prices of its insulin products. The Attorney General argued that these actions violated the MCPA, which is designed to protect consumers from unfair business practices. The ruling allows the Attorney General to continue her investigation into Eli Lilly's pricing strategies, which could have implications for how pharmaceutical companies operate in Michigan.
Background
The dispute began when the Michigan Attorney General filed a petition in the Ingham Circuit Court. She sought authorization to issue subpoenas for a civil investigation into Eli Lilly's pricing practices. The Attorney General claimed there was probable cause to believe that Eli Lilly had violated the MCPA by charging excessive prices for its insulin products compared to prices in other countries. Additionally, she alleged that Eli Lilly made false representations in promoting its generic insulin product, Lispro.
In conjunction with the petition, the Attorney General filed a complaint for declaratory relief, asking the court to clarify whether her investigation was permitted under the MCPA. Eli Lilly contended that its pricing practices were exempt from the MCPA under a specific provision that protects transactions authorized by regulatory bodies. The circuit court initially sided with Eli Lilly, leading to an appeal by the Attorney General.
The Ruling
The Michigan Supreme Court's ruling reversed the lower courts' decisions. In an opinion authored by Justice Noah P. Hood, the court stated, "When determining whether an MCPA claim falls under the MCL 445.904(1)(a) exemption, courts should consider whether the specific transaction or conduct at issue, rather than the general transaction, is authorized by law." This statement underscores the court's position that the exemption should be interpreted narrowly, allowing for more consumer protection against unfair practices.
The court found that the Attorney General had adequately pleaded her case for declaratory relief, allowing her to investigate Eli Lilly's practices without needing to first prove a violation of the MCPA. The ruling also overruled previous cases, Smith v. Globe Life Ins Co and Liss v. Lewiston-Richards, which had interpreted the exemption too broadly, effectively immunizing many businesses from MCPA claims.
Impact
This ruling has significant implications for consumer protection in Michigan. By allowing the Attorney General to proceed with her investigation, the court has reinforced the importance of holding companies accountable for their pricing practices. This decision could encourage other states to scrutinize pharmaceutical pricing and strengthen consumer protection laws across the country.
Furthermore, the court's decision to overrule Smith and Liss sets a new precedent for how exemptions under the MCPA will be interpreted in the future. This change may lead to more consumer protection lawsuits against businesses that engage in unfair or deceptive practices, particularly in the pharmaceutical industry.
What's Next
The case will now return to the circuit court for further proceedings. The Attorney General can issue subpoenas and continue her investigation into Eli Lilly's pricing practices. It remains to be seen whether Eli Lilly will appeal this decision or if there are related cases pending that could further impact the interpretation of the MCPA.