Audit of Medicare Part D Over-The-Counter Drugs

OBJECTIVE

Over-the-counter (OTC) drugs may be purchased without a prescription. Medicare Part D does not cover OTC drugs under their basic prescription drug benefit or as a supplemental benefit under enhanced alternative coverage. Subject to approval by the Food and Drug Administration (FDA), companies may convert a brand-name prescription-only (Rx-only) drug to an OTC drug. After FDA approves a brand-name drug’s conversion to OTC status, which includes requiring changes to its labeling, the drug is no longer considered an Rx-only drug. Because the labeling of brand-name drugs and generic equivalents must be identical, makers of the generic equivalents must make corresponding revisions to their labeling or cease marketing their generic equivalents. We will conduct a nationwide audit of Medicare Part D prescription drug event data to identify payments for OTC drugs sold under obsolete Rx-only labeling. We will determine whether CMS oversight of Medicare Part D sponsors ensured compliance with Federal requirements for preventing payments for OTC drugs.

TIMELINE

• October 15, 2024
  Announced
• Today
  Office of Audit Services In-Progress
• Est FY2026
  Estimated Fiscal Year for Project Completion

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