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Getting the latest healthcare news for you
Getting the latest healthcare news for you
A federal audit found Medicare Part D spent $587.7 million between 2021 and 2023 on five drugs that had already been switched to over-the-counter status. The culprit? CMS was using outdated FDA data and never told plans to stop paying for these mislabeled meds. Both the FDA and CMS are now moving to close the loophole.
A new federal watchdog report reveals that Medicare Part D — the program's prescription drug benefit — spent $587.7 million over three years reimbursing drugs it was never supposed to cover. The HHS Office of the Inspector General (OIG) found that five drugs, already approved by the FDA for over-the-counter (OTC) use, continued to be billed and paid as prescription-only medications from 2021 to 2023.
The blame falls squarely on the Centers for Medicare & Medicaid Services (CMS), which was relying on outdated FDA data to determine which drugs were eligible for Part D coverage — and never set a deadline for plans to stop paying for OTC drugs still carrying old prescription-only labels. The bulk of the improper spending — $562.1 million — was tied to generic versions of Voltaren, a topical arthritis pain reliever, which was prescribed 15.8 million times during the audit period.
By the Numbers:
Why it matters: With Medicare's hospital trust fund projected to run dry by 2033, every dollar of waste counts. The FDA has already issued a policy requiring generic manufacturers to update labeling within six months of an OTC switch. CMS has agreed to issue similar guidance — but hasn't said when.
