Michigan's highest court has cleared the way for the state attorney general to investigate Eli Lilly's insulin pricing practices, a ruling that could expose internal company records and force one of the nation's largest drugmakers to answer pointed questions about how it sets prices for a medication millions of Americans need to survive.
The Michigan Supreme Court's decision reverses lower court rulings that had blocked the investigation, handing Attorney General Dana Nessel a tool she has sought for years: the authority to issue civil investigative demands, a form of pre-lawsuit subpoena that compels a company to produce documents, answer interrogatories, and submit to depositions.
The ruling lands at a moment when insulin affordability dominates the national policy debate, with bipartisan legislation moving through Congress and the Trump administration pushing its own prescription drug cost agenda. For conservatives who want market accountability without heavy-handed regulation, the case raises a core question: Can a state attorney general use consumer protection law to police drug pricing without crossing into the kind of regulatory overreach that distorts markets?
The case centered on whether Michigan's Consumer Protection Act gives the attorney general authority to investigate pharmaceutical pricing practices before filing a formal lawsuit. Eli Lilly argued that the attorney general lacked standing to issue civil investigative demands and that the company's pricing decisions fell outside the statute's reach.
The Michigan Supreme Court disagreed. In its ruling, the court found that the Consumer Protection Act grants the attorney general broad investigative authority when there is reason to believe a company may have engaged in unfair or deceptive trade practices. The decision does not determine whether Lilly actually violated the law. It simply allows the investigation to proceed.
That distinction matters. No charges have been filed. No findings of wrongdoing have been made. The ruling is procedural, not substantive, but it opens a door that Lilly fought hard to keep shut.
STAT News first detailed the ruling and its implications for the broader pharmaceutical pricing landscape.
Insulin is not a new drug. Frederick Banting and Charles Best discovered it more than a century ago, and the original patent was sold to the University of Toronto for one dollar. Yet list prices for modern insulin analogs climbed relentlessly for decades, with Eli Lilly, Novo Nordisk, and Sanofi controlling the vast majority of the U.S. market.
Lilly manufactures Humalog, one of the most widely prescribed rapid-acting insulins in the country. The drug's list price rose from roughly $21 per vial when it launched in 1996 to more than $300 per vial at its peak. Lilly announced voluntary price cuts in recent years, capping out-of-pocket costs for many patients at $35 per month. The company has pointed to those reductions as evidence of its commitment to affordability.
Michigan's attorney general has signaled that voluntary price cuts do not resolve questions about whether the company's prior pricing conduct violated state consumer protection law. The investigation could seek internal communications, pricing models, and records related to rebate arrangements with pharmacy benefit managers.
If the investigation produces evidence of deceptive pricing practices, the attorney general could file a formal enforcement action under the Consumer Protection Act. Penalties under the statute can include injunctive relief, restitution, and civil fines.
The case also sets a precedent for other state attorneys general watching from the sidelines. Several states have pursued or considered similar investigations into insulin manufacturers. A green light from Michigan's Supreme Court strengthens the legal footing for those efforts.
Lilly has maintained that its pricing practices comply with applicable law and that the company has taken significant steps to reduce costs for patients. The company's voluntary $35 cap on out-of-pocket insulin costs mirrors the structure now embedded in federal law for Medicare beneficiaries.
The Michigan ruling arrives as Congress pushes to extend insulin price caps beyond Medicare. A bipartisan group of senators has reintroduced the INSULIN Act of 2026, which would cap insulin costs at $35 per month for Americans with private insurance starting in plan year 2027. Beginning in 2028, patients would pay the lesser of $35 or 25 percent of the negotiated net price.
The bill also includes a five-year pilot program in 10 states that would extend the $35 cap to uninsured patients, a population that often faces the full list price at the pharmacy counter.
Sen. Jeanne Shaheen, one of the bill's sponsors, framed the legislation as a natural extension of existing policy:
"We have already capped insulin for Medicare enrollees at $35 a month, this new INSULIN Act will address insulin affordability for children, adults and those who are uninsured."
Shaheen also argued the bill aligns with President Trump's broader prescription drug affordability agenda, including his "Most Favored Nation" executive order and the TrumpRx portal designed to lower drug costs. Fox News reported that the legislation has gained political momentum heading into the 2026 midterms, with Shaheen telling reporters that Trump "should support" the measure "because it is affordability."
For conservatives, the Michigan case sits at an uncomfortable intersection. State attorneys general investigating corporate pricing can serve as a check on genuinely deceptive conduct, the kind of market-policing role that even free-market advocates accept as legitimate. But the same investigative tools can also become weapons of political pressure, used to extract settlements and force policy changes that legislatures never voted on.
The Consumer Protection Act was designed to protect consumers from fraud and deception, not to set prices. Whether Attorney General Nessel's investigation stays within those boundaries or drifts into de facto price regulation will depend on what the investigation uncovers and how the office uses it.
Eli Lilly will almost certainly challenge the scope of any civil investigative demands. Expect fights over document production, privilege claims, and the boundaries of what the attorney general can compel. The Supreme Court's ruling opens the door, but the hallway beyond it will be lined with litigation.
Authorities have not publicly confirmed whether the investigation will focus on Lilly's historical list price increases, its rebate arrangements with pharmacy benefit managers, or both. The relationship between list prices and net prices in the insulin market is notoriously opaque. Manufacturers set high list prices, then negotiate rebates with middlemen. Patients without insurance or with high-deductible plans often pay something closer to the list price, while insurers and PBMs capture the rebate savings.
Investigators will need to determine whether Lilly's pricing communications to consumers were misleading, whether the company's rebate structures contributed to inflated out-of-pocket costs, and whether any representations about pricing violated Michigan's consumer protection standards.
No public results from the investigation have been released. The ruling simply removes the legal barrier that prevented the investigation from starting.
Michigan is not the only state where insulin pricing faces legal scrutiny, but its Supreme Court ruling carries outsized weight. The decision provides a roadmap for attorneys general in other states considering similar actions. It also puts pharmaceutical companies on notice that voluntary price reductions may not insulate them from investigations into past conduct.
The Trump administration's own efforts to lower drug prices, including executive orders targeting pharmacy benefit managers and international reference pricing, reflect a recognition that the status quo in pharmaceutical pricing has failed too many Americans. The question is whether state-level investigations complement that agenda or complicate it by creating a patchwork of legal exposure that drives up compliance costs and, eventually, prices.
When a century-old medication still generates billion-dollar pricing disputes, the system is not working the way it should. Whether the fix comes from Congress, the courts, or the market, someone owes patients a straight answer about where the money goes.
