Drug prices & Part D
OIG: Medicare Part D Paid 587.7 Million Dollars for Drugs That Had Already Gone Over the Counter
A federal audit found that outdated FDA data in Medicare's prescription reference file allowed Part D sponsors to keep paying pharmacies for five drugs that had already switched to over-the-counter status between 2021 and 2023.
By the Goodsurance editorial teamOctober 12, 2026
The Department of Health and Human Services Office of Inspector General found that Medicare's Part D prescription drug benefit paid 587.7 million dollars in ineligible pharmacy claims for five drugs that had already switched from prescription-only to over-the-counter status during calendar years 2021 through 2023.
The five drugs were: a generic equivalent for Voltaren, a topical cream for arthritis pain; generic versions of Pataday and Lastacaft, eye drops for allergy-related symptoms; Astepro, an allergy nasal spray; and Sklice, a topical treatment for head lice. Generic Voltaren equivalents accounted for 562.1 million dollars of the total, and the five drugs were prescribed 15.8 million times during the audit period.
Federal auditors say Medicare Part D paid 587.7 million dollars for drugs that had already gone over the counter between 2021 and 2023.
Auditors identified two root causes. First, CMS updated its Part D Formulary Reference File using obsolete FDA data that did not reflect which drugs had moved to over-the-counter status. Second, CMS had not established a deadline by which Part D sponsors were required to stop covering drugs that had already received over-the-counter approval.
OIG recommended that CMS issue clear guidance setting a firm cutoff for when Part D drug plans must stop covering newly over-the-counter drugs. CMS agreed with the recommendation. Separately, the Food and Drug Administration published a policy in December 2025 requiring generic manufacturers to update their labeling within six months after an associated brand-name drug is cleared for over-the-counter sale.
The audit did not identify any charges to individual beneficiaries and did not allege fraud. The report concluded that clearer administrative rules would prevent similar ineligible payments in the future.
In plain words
Medicare Part D is the part of Medicare that helps pay for prescription drugs. Some drugs that used to need a prescription can now be bought without one. When that happens, Medicare is supposed to stop paying for those drugs.
A federal watchdog group reviewed Medicare Part D payments and found a problem. Medicare kept paying for five drugs that had already changed to over-the-counter products. This happened because Medicare was using old information to track which drugs still needed a prescription.
Between 2021 and 2023, Medicare paid 587.7 million dollars for those five drugs. Most of that money, 562.1 million dollars, went to pharmacies for generic versions of Voltaren, a skin cream used for joint pain.
The watchdog group told Medicare managers to set a clear rule for when drug plans must stop covering drugs that go over the counter. Medicare managers agreed to make that change.
People with Medicare were not charged extra because of this problem. The payments went to pharmacies and drug plans, not to individual beneficiaries. The report said that better rules could prevent this from happening again.
Understand the basics first
Source: HHS OIG
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