Audit of Medicare Part D Over-the-Counter Drugs

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.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
October 2024	Centers for Medicare and Medicaid Services	Audit of Medicare Part D Over-the-Counter Drugs	Office of Audit Services	OAS-24-02-004	2026