Breaking: AG to sue drugmaker Eli Lilly, Whitmer to announce plan to cap insulin costs

Updated, 8:40 a.m. 1/26/22, with comments from Nessel

Gov. Gretchen Whitmer will announce in her State of the State address Wednesday night she wants to sign a law chopping the cost of insulin for people with diabetes, and Attorney General Dana Nessel plans to sue an insulin manufacturer under the Consumer Protection Act.

Whitmer told the Advance in an exclusive interview Tuesday that Nessel has launched an investigation into Eli Lilly, one of the three largest drug companies that manufactures nearly all the insulin in the United States, over rising prices.

Whitmer said she wants to work with the Legislature and Nessel to “hold drug companies accountable, lower the cost of insulin and save lives.”

Nessel said Wednesday morning that she will pursue a reconsideration of two rulings from the Michigan Supreme Court that she says hinder her department’s ability to take action under the Consumer Protection Act, Smith v. Globe Life and Liss v. Lewiston.

“No Michigander should have to face that kind of cost for life-saving medicine,” Nessel said. “While drug companies profit off of people’s health, they also benefit from a current market in which they control the pricing. Enough is enough. Our Consumer Protection Team, through our Corporate Oversight Division, is ready to devote its full resources to ensure that the proper entities are on the hook for these egregious prices, but we cannot fully protect consumers with one hand tied behind our backs. That is why this action will also pursue reconsideration of the rulings in Smith and Liss.”

Whitmer also plans to announce her support to cap the cost of insulin at $50 per month. There is currently bipartisan legislation to do so, House Bill 4346, sponsored by Rep. Sarah Cambensy (D-Marquette), which passed the lower chamber in March 2021.

“I’m going to call to get that to my desk,” Whitmer told the Advance.

Over 912,000 Michiganders need insulin, per the governor’s office, and the average cost of a single vial is $98.70. Most people who use it need two or three vials a month, costing around $200 or $300. The governor’s office said the price of insulin tripled from 2009 to 2019. The proposal capping insulin at $50 per month “would be a sixth of the cost that they’re currently incurring,” Whitmer said.

Last fall, the Democratic-controlled U.S. House passed legislation limiting insulin costs to $35 per month, but it has not passed an evenly divided Senate. Other states, including Colorado, have capped the cost of the drug.

In her address, Whitmer plans to highlight the story of two people from Wyoming with Type I diabetes who are struggling with high insulin costs. She said “lowering the cost of insulin will save lives and help Michiganders pay the bills, put food on the table or save for the future.”

The Fiscal Year 2022 budget included more funding for mental health in schools. Her office said that has funded 560 additional nurses, counselors and social workers to care for our kids.

Whitmer also said she plans to propose “another bold investment” of $25 million in mental health in schools in her upcoming Fiscal Year 2023 budget proposal in February. Funding will go to retain or recruit 500 mental health professionals in schools. That fiscal year begins Oct. 1.

Asked if she was focusing on these health care initiatives, in part, because of the upheaval caused by the COVID-19 pandemic, Whitmer said, “Yes, and more.” She noted she’s been doing roundtables across the state before her State of the State speech “and mental health needs come up in every conversation … [with] small business owners in the northern part of the state, senior citizens in Southwest Michigan, women in Oakland County.

“We know that mental health services, mental health needs  pre-pandemic were not sufficient, and then you add the pandemic where everyone’s going to be … feeling the stress of all the pressure of the last two years. And mental health is a universal need. And for those who are suffering pre-pandemic, it’s exponentially tougher.”

Senate Majority Leader Mike Shirkey (R-Clarklake) has said legislation that proposes to privatize the state’s $3.6 billion public mental health system — Senate Bills 597 and 598 — is a top priority this year. GOP lawmakers said it would simplify a confusing bureaucracy and better integrate physical and mental health care for low-income residents. 

However, mental health providers and advocates oppose the package, which resembles a provision in the FY 2020 budget that Whitmer vetoed, saying it would damage mental health care for low-income Michiganders.

The Advance asked Whitmer if she would sign the legislation.

“That is not a part of what I’m going to be promoting [Wednesday], and in the budget,” she said. “I think that the mental health community has a lot of, I think, very legitimate concerns about the impact of something like that. So I think if we can keep the conversation around solving problems and meeting people’s mental health needs, maybe we can find a solution that doesn’t entail privatization.”

Whitmer talked to the Advance after the announcement that General Motors will make a roughly $7 billion investment in Michigan for electric vehicles. Whitmer signed bipartisan legislation in December for a new business incentive program aimed at attracting projects from companies like GM.

“Today was a good day,” she said.

Whitmer also plans to propose in her speech a $2,500 electric vehicle credit, as first reported by the Detroit News. The Advance asked if the state can do more to attract and retain talent that this industry needs to compete with other states.

Whitmer said “absolutely” and cited her 60 by 30 goal for 60% of Michigan’s workforce to obtain a postsecondary degree or certificate of skill by 2030. She also noted two other programs, Futures for Frontliners, which provides free community college tuition for essential pandemic workers, and Michigan Reconnect, which provides tuition-free paths to an associate degree or skills certificate for eligible adults.

“We’re making progress on that, certainly the pandemic, like everything, has disrupted so much of the work,” she said. “… I think with GM’s investment here and the potential of other employers choosing Michigan, we have a great story to tell in terms of …high quality of life, low cost of living, talented workforce, who are not afraid to work hard. But I think ensuring that more people have got real paths to enhance their skillset is going to be important as we look to see how the industry mobility is changing. And frankly, how the world is changing, how the economy is changing, how manufacturing is changing, and we want to be the epicenter of that. And so continuing new investment in our workforce is really important.”

Whitmer also plans to call for the Earned Income Tax Credit (EITC) to be tripled from 6% to 20% of the federal credit, restoring it to the level before GOP former Gov. Rick Snyder cut it a decade ago to pay for a $2 billion annual business tax cut, as the Associated Press first reported. More than 730,000 working-class families receive the refundable tax credit a year, with an average credit of $150. That would increase to about $500 under Whitmer’s plan.

There’s currently legislation with bipartisan support that would increase the EITC to 10%.

She also is asking for the repeal of the pension tax, another initiative signed by Snyder as part of his 2011 business tax cut, as first reported by the Detroit Free Press. Rolling back the tax on pension income would be an average savings of about $1,000 per year and impact 500,000 seniors, per Whitmer’s office. She proposed this in her first FY 2020 budget plan, which the GOP-led Legislature rejected. This time, she is not calling for replacement revenue as tax collections and federal stimulus aid have given the state a significant surplus.

As Senate minority leader, Whitmer opposed both GOP tax changes. 

While Whitmer stresses her tax relief plans and her office touts that she “made the largest education investment in Michigan history without raising taxes, something she has accomplished three years in a row,” House Appropriations Chair Thomas Albert (R-Lowell) also last week called for tax relief, but has not specified a certain plan.

“Michigan taxpayers fund state government through their hard work and sacrifice,” Albert said in a statement Friday. “Runaway inflation brings more tax revenue to state government at the expense of hard-working taxpayers, hurting their family budgets. With state tax revenue projections well ahead of previous expectations, it is time we talk about tax relief rather than increasing ongoing government spending.”

Asked if she would sign cuts to the state income tax or the corporate income tax — two areas Republicans have traditionally targeted, Whitmer said, “So the most equitable way that we can give people in Michigan tax relief is undoing the burden that was placed on our retirees and on our working poor back in 2011. It’s something that I opposed then, I still think that it is unfair in the most literal sense of the word. And that’s why this is where I think real tax relief can have the biggest equitable impact by increasing their income tax credit and eliminating the retirement tax.”

The Advance asked in a follow-up if she was focused on cutting the income tax or the corporate tax rate at this time.

“Well, when Republicans shifted taxes under retirees and the working poor, it had a massive impact on people who are playing by the rules, showing up every day and doing the right thing,” Whitmer said. “And so that is the best way to give people tax relief that increases the quality of life for people in our state, and ability to participate in our economy. So those are going to be the driving assessment I’ll make on any proposal. And if you want to cut taxes and do it in an equitable way, this is the best way to do it. And … I’m eager to work with anyone who wants to actually accomplish that.”

Whitmer’s address will be at 7 p.m. Wednesday and delivered virtually for the second straight year instead of at the Michigan House of Representatives due to the COVID-19 pandemic.

When asked if she expected to do another virtual speech this year, Whitmer said, “I did not. I hoped by now, like everyone, that the virus would be a distant memory, and obviously that’s not the case. So I did confer with the speaker of the House [Jason Wentworth (R-Farwell)], and we all agreed that it didn’t make sense to do it in person. 

“And frankly, that was before the first of the year. And after last week when they had to cancel session [due to COVID], I think that just solidified that we had made the right decision.”