LANSING, Mich. — The Michigan Supreme Court will decide in the coming months whether an effort should move forward that's challenging longstanding case law blocking the state’s ability to investigate inflated drug prices.

The high court heard arguments Thursday morning on Attorney General Dana Nessel’s effort to investigate and potentially sue the drug company Eli Lilly on the grounds that its insulin pricing violates the Michigan Consumer Protection Act.

In order to do so, the state Supreme Court must overturn high court decisions from 1999 and 2007 that bar investigations of an entity already regulated by a separate state or federal agency.

Eli Lilly is regulated by both the Federal Drug Administration and the Michigan Board of Pharmacy, neither of which have authority over pricing.

“This act cannot be applied as originally intended,” Assistant Attorney General Darrin Fowler told justices about the Consumer Protection Act on Thursday. “The present dynamic allows a seller to get out from under it if they can merely point to some general authorization or a license.

“The present dynamic would bewilder any Michigan consumer,” he added.

Eli Lilly’s lawyer, John O’Quinn, noted the Legislature over the past 25 years has amended the Consumer Protection Act some 23 times, but never changed the language that bars the state from investigating Eli Lilly’s drug prices. He argued the attorney general’s case was “not about consumer protection at all.”

“It is just about overturning precedent,” O’Quinn said. “To be clear, the attorney general has not identified a single patient that cannot access Lilly’s insulin for less than $35 a month, and has rebuffed requests by Lilly to engage on this so, if there were any gaps in Lilly’s insulin affordability program, Lilly could fill them.”

Justices expressed some concerns with overturning the prior Supreme Court decisions — referred to as Smith and Liss — after the decisions have guided actions for about two decades.

“Even if we were to agree with you that Smith and Liss were incorrectly decided what do we do with the fact that for 25 years everybody in Michigan has been relying on them?” Justice Megan Cavanagh asked.

Fowler responded that the focus should be on the plain language of the Consumer Protection Act and people’s expectations of what it will protect, rather than court decisions issued years ago.

“The best course is for this court to restore the act’s original intent as passed by the Legislature, what the consumers would expect of that act,” Fowler said. “They expect it is going to help them in the purchases of the necessities of life.”

Nessel announced in January 2022 that she planned to begin an investigation into Eli Lilly’s insulin prices, but acknowledged case law would need to be overturned in order to allow the investigation to proceed.

In order to start an investigation under the Michigan Consumer Protection Act, Nessel's office must petition the court with a formal petition for investigative subpoenas. Those were filed in January 2022 and challenged by Eli Lilly, launching the nearly two year court fight over the attorney general's authority to investigate Eli Lilly.

Nessel has argued the risk of a protracted court fight was worth the immediate task of investigating insulin prices and the long-term ability of state investigators to tackle reviews of other industries regulated by other oversight bodies.

The limits placed on the Michigan Consumer Protection Act via Supreme Court decisions in 1999 and 2007 have long been a source of frustration for the attorney general's office, which is tasked with consumer protection.

The decisions have effectively blocked the office from investigating under the Michigan Consumer Protection Act other regulated licensed industries such as nursing homes, construction companies and medical professionals.

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