Medicare Part D paid $588M for over-the-counter drugs

A federal watchdog has found that Medicare Part D sponsors made approximately $587.7 million in ineligible payments to pharmacies between 2021 and 2023. The payments were made for five drugs that carried obsolete prescription-only labeling, even though their brand-name counterparts had already transitioned to over-the-counter status.

The U.S. Department of Health and Human Services’ Office of Inspector General stated that the funds will not be recovered because the payments complied with the Medicare guidance in place at the time. The error occurred because the Centers for Medicare & Medicaid Services relied on FDA data to identify drugs that had switched from prescription-only to over-the-counter.

The majority of the ineligible payments, totaling $562.1 million, involved generic versions of Voltaren, a topical arthritis medication. The remaining $25.6 million was attributed to four other products: Pataday and Lastacaft (allergy eye drops), Astepro (hay fever nasal spray), and Sklice (head lice lotion). While the amount is significant, it represents roughly 0.16% of the total $360 billion in Part D benefits paid during that period.