OIG identifies $587.7 million in Part D payments involving obsolete prescription labeling
Oct 11, 2026 edition · GC-2026-0023 · Published 2026-10-11 · Version 3 · Announced
OIG attributes $587.7 million in 2021–2023 Part D payments to five drugs sold under obsolete prescription-only labels. Its recommendation targets sponsor rejection timeframes, while a separate FDA policy governs manufacturers' label updates.
What happened
The audit, issued August 31 and posted September 2, found payments continuing more than a year after associated brand-name drugs switched to over-the-counter use. OIG attributes the five-drug payment problem to outdated FDA data in CMS's formulary reference file and the absence of a CMS timeframe for sponsors to reject these claims. The $587.7 million is the audit's finding of ineligible payments during 2021–2023, rather than an announced recovery completed this October.
OIG distinguishes a December 2025 FDA policy requiring generic manufacturers to update labels as early as possible and within six months from its recommendation that CMS issue sponsor payment-rejection guidance. CMS concurred, but the retained recommendation tracker lists the guidance recommendation open and unimplemented. The manufacturer's labeling period should therefore not be substituted for an already implemented universal sponsor rejection deadline. Monitoring reference data and Rx-to-OTC changes is a control response to the audit, with later implementing CMS direction still material.
Scope and timing
- Authority status
- Announced
- Applicability
- Operationally relevant
- Audience
- Health systems, Provider networks
- Jurisdiction
- Federal
- Affected functions
- Managed Care, Compliance, Revenue Cycle
- Responsible owner
- Managed Care
Why it matters
Obsolete labeling and reference data can leave drug eligibility controls behind regulatory changes. The audit does not itself establish a new universal rejection deadline.
Recommended action
Pharmacy and Managed Care owners should assess Rx-to-OTC monitoring, reference-file updates and claims review with counsel, and monitor implementing CMS guidance.
Sources
- Part D payments for OTC drugs under obsolete prescription labelingOfficial · HHS OIG · 2026-09-02 · Source review 2026-10-11
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