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AG Nessel Files Application Before Michigan Supreme Court in Continued Fight to Lower Drug Costs

Previous Rulings by MSC Limit Department’s Ability to Investigate Eli Lilly for Excessive Insulin Pricing.

LANSING – Michigan Attorney General Dana Nessel filed a bypass application to the Michigan Supreme Court asking it to take up her challenge of past decisions by the Court that have limited enforcement of the Michigan Consumer Protection Act (MCPA) for the past two decades.

Earlier this year, Nessel launched an investigation into Eli Lilly related to its insulin pricing practices. Eli Lilly is one of the three primary manufacturers of such life-saving drugs used by diabetics. At the same time, Nessel filed a lawsuit against Eli Lilly seeking a declaratory judgment that the company’s insulin sales are not exempt under the MCPA—a position put into doubt under the two Michigan Supreme Court decisions that Nessel now asks the Court to reconsider. Following these precedents, the Ingham County Circuit Court ruled that Eli Lilly’s insulin pricing practices are exempted from scrutiny under the MCPA. The same rationale would prevent the Attorney General from using the MCPA to examine pricing misconduct with regard to any other prescription medication.

“No Michigander should forgo life-saving medicine because they cannot afford to pay the price set by drug companies,” said Nessel. “Enough is enough. I am ready to devote the full resources of my Consumer Protection Team to ensure that the proper entities are on the hook for charging the kind of egregious prices the MCPA was designed to guard against, but we cannot fully protect consumers with one hand tied behind our backs. That is why we need the Court to hear our challenge to the rulings in Smith and Liss.”

Smith v Globe Life and Liss v Lewiston, decided in 1999 and 2007 respectively, interpret an exemption contained in Section 4(1)(a) of the MCPA as applying whenever the general transaction is specifically authorized by law, regardless of whether the specific misconduct alleged is prohibited. Under this interpretation, members of any industry that is generally regulated could be deemed “exempt” from the MCPA, thereby providing a free pass for misconduct, regardless of how egregious.

The bypass application states, “The Smith and Liss decisions have unjustifiably transformed a narrowly stated exception within the MCPA into a broad shield potentially available whenever a State or Federal regulatory scheme relating to the underlying transaction can be identified—regardless of whether that regulatory scheme does anything to protect consumers from deceptions, gouging, unfairness, or other improprieties. This Court’s review is necessary.”

Ingham County Circuit Court issued a final order granting Eli Lilly’s motion for summary disposition and dismissing the declaratory judgment action brought by the Attorney General. The Attorney General filed an appeal in the Court of Appeals on July 21. The Court of Appeals is bound to follow precedent and will most likely uphold the circuit court’s ruling making it inevitable that the challenge will make its way to the Michigan Supreme Court.

The application further states, “And since the Court of Appeals is bound to follow these precedents, there is no meaningful value waiting for that Court’s review of the arguments presented here...Meanwhile, Michigan diabetics daily face the dilemma of choosing between lifesaving medication, food, and other necessities to maintain a quality life with no hope that the MCPA can help or protect them. The ongoing and substantial harms to diabetics across the State cannot wait for the inevitable affirmance from the Court of Appeals and thus review is warranted now.”

A copy of the filed bypass application to the MSC is available here.

The Centers for Disease Control estimates that there are 34.2 million Americans with diabetes. In Michigan, the American Diabetes Association estimates that 912,794 people, or 11.5% of the adult population, have diabetes, and that those with diabetes have medical expenses approximately 2.3 times higher than those who do not.

Those who wish to share their experience with the high cost of insulin are asked to fill out a consumer complaint form on the Attorney General's website. The Attorney General is interested in perspectives from consumers, pharmacists, and health professionals. If your concerns relate to the cost of a particular medication, please tell us the brand and product.