Somerset settles olopatadine labeling claims for $4 million plus interest

What happened

Somerset Lifesciences executed a settlement effective October 15, announced by DOJ October 16, requiring $4 million plus interest, all designated as restitution. The agreement resolves civil monetary claims under the common-law theories of payment by mistake and unjust enrichment. Paragraph 3(b) expressly reserves False Claims Act liability; this is not an FCA release. Recital E states that the agreement is not an admission of liability by Somerset. That executed provision supplies the controlling qualification to the press release's generic reference to admissions. The agreement requires payment within 10 business days after its effective date but does not state an interest rate or commencement date.

The covered conduct concerns Somerset's manufacturing, labeling, marketing and sale of olopatadine hydrochloride ophthalmic solution USP, 0.1% as prescription-only from February 14, 2020 through October 17, 2023. Its reference product, Pataday Twice Daily Relief 0.1%, received approval for a full OTC switch on or about February 14, 2020. The agreement describes the resulting requirement, absent a meaningful difference between the prescription and OTC versions, to update the generic's labeling or seek withdrawal of its application. The government contended that Somerset continued prescription-only sales, causing Medicare payments for a product no longer eligible for Part D coverage. These remain the government's contentions, not an adjudicated liability finding.

Why it matters

Rx-to-OTC changes can affect reimbursement eligibility while product and claims systems still carry prescription-only indicators. The agreement also shows why the actual release matters: settlement of common-law claims does not establish that FCA exposure was resolved.

Case details

agencies

DOJ, HHS-OIG

entities

Somerset Lifesciences Inc.

action Type

Settlement

event Date

2026-10-15

alleged Conduct

Continuing prescription-only olopatadine labeling and sales after the reference product's OTC switch, allegedly causing mistaken Medicare payments during February 14, 2020 through October 17, 2023.

resolution

Agreement effective October 15 requires $4 million plus unspecified interest, all restitution. It releases payment-by-mistake and unjust-enrichment claims, expressly reserves FCA liability and contains no admission of liability.

Operational lessons

• Connect product-label changes with reimbursement eligibility controls.
• Retain authoritative support for product-status and claims-system changes.
• Read the actual release and reserved claims before describing the legal scope of a settlement.
• Distinguish government contentions from admissions or adjudicated findings.

Implementation playbook

1. Recommended internal target: identify responsibility for receiving and implementing Rx-to-OTC changes across pharmacy product records and reimbursement systems. Revenue Cycle · Due 2026-10-23
2. Recommended internal target: reconcile relevant product-status changes with paid claims and document any unresolved reimbursement questions for Legal, distinguishing common-law settlement terms from reserved FCA liability. Compliance · Due 2026-10-30

Sources

• DOJ announcement of Somerset olopatadine settlementOfficial · U.S. Department of Justice · 2026-10-16
• Somerset Lifesciences executed settlement agreementOfficial · U.S. Department of Justice