The prescription flag outlasted the switch
HHS's Office of Inspector General published the audit on August 31. It examined Medicare Part D payments for prescriptions filled in 2021–2023 involving drugs whose brand-name products switched from prescription-only to over-the-counter status in 2020–2022. Across five drugs and 35 National Drug Codes, OIG identified $587.7 million in ineligible payments associated with about 16.8 million prescription drug events. Those events are payment records, not a count of residents.
The audit traced a specific data problem. Some generic equivalents continued to appear under obsolete Rx-only labeling and NDCs after the brand-name switch. CMS used FDA data containing those entries to update its Part D Formulary Reference File. CMS also allowed coverage of existing prescription-labeled inventory without setting a timeframe for sponsors to begin rejecting payments for that inventory.
Generic equivalents of Voltaren accounted for $562.1 million of the total. The other audited payment findings concerned products associated with Pataday, Astepro, Lastacaft, and Sklice. This was a defined set of switches and NDCs, not a finding that every diclofenac, olopatadine, azelastine, alcaftadine, or ivermectin formulation is nonprescription or ineligible for coverage.
Separate the audit window, labeling policy, and payment guidance
OIG allowed a one-year interval after the brand-name drug became available for purchase over the counter in its analysis to account for inventory transition. That analytical choice is not a newly announced one-year coverage rule. OIG also expressly declined to recommend recovery of these payments because sponsors had complied with CMS's reference file and guidance about existing inventories. The report does not establish that a particular pharmacy committed fraud or that a particular resident owes money.
A separate FDA policy took effect on December 8, 2025. MAPP 5200.11 says holders of approved generic-drug applications should submit revised labeling as soon as possible and within six months after FDA approves the reference drug's full prescription-to-nonprescription switch. Its procedures address full switches; partial switches and clinically meaningful differences between products require attention to their own scope. This is a manufacturer-labeling policy, not a facility medication-order instruction.
OIG recommended that CMS issue guidance on timeframes for rejecting payments for OTC drugs sold under obsolete Rx-only labeling. In the response included with the audit, CMS concurred and said it would issue guidance consistent with FDA's updated policy. That response describes intended agency work. The audit does not supply a new implementation date or a claim-by-claim coverage determination.
Make the coverage question answerable
For a small consultant pharmacy practice, our editorial takeaway is to make a questionable product flag traceable. The consultant may first encounter a discrepancy in an imported medication list, a pharmacy message, or a facility billing question. Writing only “OTC?” leaves the next person to reconstruct the product and the reason for concern.
A compact handoff can carry the following information through the facility's established process. These are suggested documentation fields, not new CMS requirements:
- Identify the product: preserve the available NDC, strength, dosage form, route, and label or dispensing-record source. State when a detail is unavailable rather than substituting an ingredient-wide assumption.
- Show the discrepancy: retain the source and check date for the Rx-only flag alongside the official switch evidence, including whether the switch is full or partial.
- Assign the question: identify the dispensing-pharmacy or Part D sponsor contact responsible for clarifying the applicable coverage decision, and record the response and its scope.
- Return the answer: keep an unresolved question visible until the response reaches the appropriate record. Track any separate supply or order issue through the responsible clinical team; payment status alone does not settle treatment.
Use the finding at the level the evidence supports
The audit contains no nursing-facility subgroup, resident-harm estimate, or test of consultant-pharmacist software. It cannot show how common this discrepancy is in a particular practice. Nor does a product's presence in the Formulary Reference File alone settle eligibility: the report notes that sponsors remain responsible for coverage determinations.
A useful software demonstration would preserve the product identifier, source date, question, owner, response, and correction history when a record is imported or exported. That is an editorial acceptance question prompted by the audit, not evidence that any reviewed vendor already performs those tasks. The next policy development to watch is CMS's actual timeframe guidance, with its effective date and product scope intact.