In mid-September 2022, the United States Department of Justice (DOJ) announced a $7.9 million settlement with Akorn Operating Company LLC, to resolve allegations that Akorn caused Medicare Part D to pay for three generic Akorn drugs that were no longer eligible for Medicare coverage. As part of the settlement, Akorn did admit that it continued to sell generic drugs under obsolete prescription-only labeling.
Medicare Part D reimburses for prescription only (Rx-only) drugs, but not for over the counter (OTC) drugs, which may be purchased without a prescription. Subject to FDA approval, pharmaceutical manufacturers can seek to fully convert a brand-name Rx-only drug to an OTC drug. Once the Food and Drug Administration (FDA) approves a drug’s full conversion to OTC status, the drug is no longer considered an RX-only product and makers of generic equivalents have to either seek FDA approval for their own OTC switch or seek withdrawal of their generic’s Rx-only approval and stop marketing it.
At issue in this settlement were three generic drugs sold by Akorn: Diclofenac Sodium 1%, Olopatadine Hydrochloride 0.1% and 0.2%, and Azelastine Hydrocholoride 0.15%. Each of these drugs were generic equivalents of other drug manufacturers’ brand name products and were initially approved as Rx-only. The FDA approved a full Rx to OTC conversion for Diclofenac and Olopatadine in February 2020 and for Azelastine in June 2021.
This meant that on the OTC switch dates (February 2020 for...
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