An insulin pen | Jonathan Bachman/Getty Images
Michigan Attorney General Dana Nessel confirmed Wednesday that she is launching an investigation into Eli Lilly and Co., one of the three largest drug companies that manufactures nearly all the insulin in the United States, for excessive pricing of the necessary drug to treat diabetes.
Gov. Gretchen Whitmer told the Advance the AG’s action was coming in the runup to her State of the State address Wednesday night. Whitmer also announced her support for capping the cost of insulin at $50 per month A bipartisan bill that passed the lower chamber in March 2021 would do just that, House Bill 4346, sponsored by Rep. Sarah Cambensy (D-Marquette).
In a roundtable with reporters on Thursday, Nessel said rising prices of prescription drugs is “an issue that so many Michiganders struggle with.” In Michigan, an estimated 912,794 people have diabetes, about 11.5% of the population, according to the American Diabetes Association. Each year, about 69,534 new Michiganders are diagnosed with the disease. The same report also found that those diagnosed with diabetes have medical expenses about 2.3 times higher than those without diabetes.
By bringing this case, Nessel said she hopes to help lower prescription drug prices. Nessel submitted her office’s filings Tuesday to an Ingham County judge, asking to allow the investigation under the Michigan Consumer Protection Act (MCPA).
“We have worked on putting this filing together for quite some time at this point and we’re excited to be able to finally initiate this investigation formally,” Nessel said. “And the Michigan Consumer Protection Act is the mechanism available to my office to address excessive price gouging and excessive pricing.”
However, Nessel’s office is worried that Eli Lilly and Co. will cite two decisions made by the Michigan Supreme Court, Smith v. Globe Life in 1999 and Liss v. Lewiston in 2007, to potentially get the investigation thrown out. The two court cases established an exemption to the MCPA, saying that if an alleged misconduct happens within a regulated industry, then it is not punishable under the law. Nessel’s petition to the court requested that exceptions to the law do not apply in this instance.
Nessel explained that the precedents set by Smith v. Globe and Liss Lewston “have made it not just incredibly difficult, but really impossible to investigate price gouging and excessive pricing for these types of products.” She said that is the reason “why it is just so incredibly important that we bring this case.”
“You can’t win a case you never file,” Nessel said. “And it’s worth challenging these decisions, because quite honestly, we can’t do worse, right? If we lose them, we’re just in the exact same position that we’re in right now.”
In a statement to the Advance, a Lilly diabetes spokesperson said the company “is deeply disappointed by the false accusations and inaccurate claims about Lilly’s insulins that the Michigan Attorney General is making” and that the company is committed to offering affordable solutions.
“Lilly welcomes systemic solutions and new public policies, such as copay caps on insulins like the one Governor Gretchen Whitmer has proposed, which could bring much-needed relief to people who face higher out-of-pocket costs for their medications,” the company said. “Until actual reforms fill these gaps, Lilly remains firmly committed to providing affordability solutions to people who need them.”
In a statement to the Advance, a Lilly diabetes spokesperson said the company 'is deeply disappointed by the false accusations and inaccurate claims about Lilly’s insulins that the Michigan Attorney General is making' and that the company is committed to offering affordable solutions.
Several states, including Colorado and Kentucky, already have laws capping the price of insulin.
According to the governor’s office, the average cost of a single vial of insulin is $98.70. Most users require two or three vials a month, making the cost anywhere between $200 and $300 a month. The governor’s office said the price of insulin tripled from 2009 to 2019.
Whitmer said that as a result of the high prices of insulin, “too many Michiganders are forced to forgo insulin or ration it — putting their lives at risk,” she said.
“We all agree that insulin costs too much, and I know we can work together to hold drug companies accountable, lower costs and save lives.”
Nessel said she supports “the governor’s efforts to address insulin pricing”, and that by launching an investigation into Eli Lilly and Co., she hopes to not only lower the excessive costs of insulin but also to set a new precedent about what can be litigated under the Michigan Consumer Protection Act.
“This is the tool though that I have to address excessive insulin prices, [Whitmer’s] efforts may be successful, they might not be,” Nessel said. “But the important thing to know is that if we’re successful, it won’t just be about insulin prices. And it actually won’t just be about medication. It will allow us to better protect consumers on a broad range of issues.”
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