# Medicare's $562M mistake on a drug that shouldn't be covered

> Medicare Part D paid hundreds of millions for over-the-counter drugs it's legally barred from covering, and beneficiaries will foot the bill when the error is fixed.
- Title: Medicare's $562M mistake on a drug that shouldn't be covered
- Summary: Medicare Part D paid hundreds of millions for over-the-counter drugs it's legally barred from covering, and beneficiaries will foot the bill when the error…
- Keywords: medicare part d, over-the-counter drugs, diclofenac, federal audit, improper spending, drug coverage, beneficiary costs, cms, prescription drugs, healthcare policy, Medicare's, 562M
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/09/20/medicare-part-d-plans-paid-562-million-for-generic-voltaren-a-doctors-prescription-still-doesnt-make-an-otc-drug-part-d-eligible
- Author: Gerelyn Terzo
- Published: 2026-09-20T15:32:20+00:00
- Read time: 2 min
- Topics: medicare part d, over-the-counter drugs, diclofenac, federal audit, improper spending, drug coverage, beneficiary costs, cms, prescription drugs, healthcare policy
## Medicare paid $562 million for a drug it can't cover
A federal audit found Medicare Part D sponsors paid over half a billion dollars for generic diclofenac gel after it switched to over-the-counter status, which the program was never legally allowed to cover.
## Five drugs made the same problematic switch
Beyond diclofenac, four other medications moved from prescription to OTC while still being covered: Pataday, Astepro, Lastacaft, and Sklice. Total improper spending from 2021 through 2023 reached $587.7 million.
## How the mistake happened
Generic products kept their old prescription-only labels and identification codes after switching to OTC. Medicare incorporated that outdated data into its formulary file, so claims kept clearing without a deadline for rejection.
## A prescription can't override the law
Medicare Part D covers prescription drugs only. Federal statute excludes over-the-counter medications, and a doctor's signature does not override that exclusion, no matter how identical the chemistry.
## The bill lands on beneficiaries
When Medicare stops covering these drugs, the copay becomes the full retail price. That money won't count toward your deductible or annual out-of-pocket cap, leaving your pocket without moving you toward any coverage threshold.
## No plan can fix this at open enrollment
Shopping for a different Part D plan won't help because every plan is bound by the same statutory exclusion of OTC drugs. Some Medicare Advantage plans offer separate OTC allowances, but that's a different benefit entirely.
## Check your pharmacy claims now
Pull your last 12 months of claims and flag anything that switched from prescription to OTC. Build the retail cost into your budget before the denial takes effect on an unannounced timeline.
## Ask your doctor about prescription alternatives
Request a prescription-only alternative from your prescriber, then verify it's covered by your plan. Don't assume a related drug is both suitable and covered, especially for older patients.
## Price the OTC version before you buy
Discount cards and pharmacy differences can narrow the cost gap. Check prices at multiple pharmacies before paying cash, even though the savings may fall short of what you were paying as a copay.
## Key takeaway

When over-the-counter drugs you've been getting through Medicare Part D stop being covered, you'll pay full retail price with no help toward your deductible or out-of-pocket cap, and no plan can fix it because the law excludes all OTC drugs.