Michigan's Supreme Court ruled 4-3 on July 31 to clear the way for Attorney General Dana Nessel to investigate whether Eli Lilly's insulin pricing violated state consumer protection law. The decision overturned 25 years of Michigan precedent — Smith v. Globe Life (1999) and Liss v. Lewiston-Richards (2007) — that had effectively shielded any licensed business from state consumer protection investigations regardless of the alleged misconduct. Nessel opened the insulin investigation in January 2022. She alleged Eli Lilly charged "grossly" excessive prices for Humalog, Lispro, and Basaglar. Those prices forced patients to ration or forgo insulin and, in some cases, caused "serious disability and even death." The case now returns to the Michigan Court of Appeals for expedited review; Nessel hasn't formally charged Eli Lilly yet.

1. States Can Police Drug Pricing (AG Dana Nessel, patient advocates)

The FDA regulates whether insulin can be sold. Nobody regulates what it costs.

The state had its hands tied for 25 years. Under Smith and Liss, any licensed business — a pharma company, a nursing home, a used-car dealer — was effectively immune from Michigan consumer protection law simply by holding a license, even if the alleged misconduct had nothing to do with its regulatory oversight. Michigan stood alone: among 49 state consumer protection acts in a federal survey, Michigan's was the only one courts threw out on regulatory exemption grounds. AG Nessel: "We will no longer have our hands tied while pharmaceutical giants squeeze households over insulin and other necessary medications."

The FDA regulates safety, not price. The key line from the majority: the FDA and Michigan Board of Pharmacy authorize Eli Lilly to sell insulin, but neither has ever regulated what Lilly charges for it. Letting federal product-safety oversight shield pricing conduct from state law, Justice Hood wrote, would protect businesses that rely on Smith and Liss to engage in "unfair, unconscionable, or deceptive business practices" — "this is not a valid reliance interest."

The price math is damning. Before Lilly's voluntary 2023 cuts, Humalog listed at $274.70 per vial. Oklahoma AG Gentner Drummond alleged manufacturing cost had fallen to less than $2 per vial. A 2024 JAMA study put a full year's supply at under $130 per patient. Even after accounting for rebates and discounts, US insulin prices in 2024 remained 2.3 times higher than in comparable nations, per RAND. A bipartisan 2021 Senate Finance Committee investigation found manufacturers raised prices "in lockstep" — a "vicious cycle" that benefited middlemen while leaving uninsured patients exposed.

Other state AGs have already acted. Minnesota AG Keith Ellison settled with Eli Lilly in February 2024, securing a $35/month insulin cap for all Minnesotans through 2029. Oklahoma AG Drummond filed suit in May 2024 against Lilly, Novo Nordisk, Sanofi, and major pharmacy benefit managers under the state's Consumer Protection Act.

The investigation overturns 25 years of settled law before Nessel has alleged any violation.

Nobody has actually charged Lilly with anything. At oral arguments in November 2025, Eli Lilly attorney John O'Quinn argued Nessel was "putting the cart before the horse" — the AG sought investigative subpoenas without first alleging a legally viable violation. Pharma's position: a state AG shouldn't be able to issue subpoenas to a federally-regulated company before she can point to what law was actually broken.

The ruling exposes every licensed business to double jeopardy. Zach Rudat, director of the Michigan Alliance for Legal Reform, warned the ruling would expose "regulated industries and licensed professionals to overlapping standards and abusive litigation." His coalition — which includes the NFIB and other business groups — is calling on the Michigan Legislature to codify the regulatory compliance exemption and restore "clear, predictable standards."

Lilly already cut prices voluntarily. In March 2023, the company slashed Humalog and Humulin list prices by 70% and capped out-of-pocket insulin costs at $35/month for all patients. CEO David Ricks said Lilly made the cuts "completely voluntarily because it's time and it's the right thing to do." Lilly's argument is that market pressure and federal mechanisms already produced the result consumer advocates wanted — without state AG subpoenas.

3. Still, the Majority Jumped Ahead of the Case (Justice Kyra Harris Bolden, joined by Zahra and Bernstein)

The majority overturned 25 years of precedent to decide a question nobody had actually asked yet.

Nessel never alleged a violation. So there was nothing to rule on. Bolden argued Nessel asked courts to bless her power to investigate before she had alleged any actual violation. Bolden: "Without trying to argue a violation of the MCPA, there's no actual controversy" for declaratory relief. "Plaintiff has missed the first step of demonstrating that there was an actionable claim under the MCPA."

Overturning settled law on an advisory question is extraordinary. The Smith and Liss decisions governed Michigan consumer protection law for 25 and 19 years, respectively. Regulated industries structured their legal affairs around those rulings. Bolden and the two other dissenters — Justices Zahra and Bernstein — aren't arguing insulin pricing is fine. They're arguing the majority overturned two and a half decades of precedent in a case that didn't yet have a live controversy.

The disagreement isn't partisan. Six of Michigan's seven justices are Democratic-nominated. Brian Zahra — the court's lone Republican-nominated justice — joined the dissent alongside two Democratic-nominated justices, Bolden and Bernstein. The split is procedural and legal, not ideological.

Where This Lands

The ruling doesn't find that Eli Lilly broke the law — it gives Nessel permission to investigate. Nessel's camp sees it as a national model: states locked out of consumer protection enforcement against pharmaceutical companies now have a path back in. Lilly and the business coalition are pressing the Michigan Legislature to pass a law reversing the ruling before Nessel brings charges. The three dissenters say the majority wiped out 25 years of settled precedent in a case that didn't yet have a live controversy — and that every licensed industry in Michigan now faces uncertainty about what consumer protection enforcement means for them.

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