Federal officials allege Medicare Part D paid claims for Somerset Lifesciences Inc.’s generic olopatadine eye drops after the branded product moved to nonprescription status; a settlement requires the company to pay $4 million plus interest.
The U.S. Department of Justice (DOJ) alleged that Somerset manufactured, labeled, marketed and sold olopatadine hydrochloride ophthalmic solution USP, 0.1%, as prescription-only during the period covered by the claims: Feb. 14, 2020, through Oct. 17, 2023. The government contended that the conduct led to Medicare claims and payments for the drops.
The Food and Drug Administration’s switch list records Feb. 14, 2020, as the approval date for Pataday Twice Daily Relief’s move to nonprescription status. The settlement agreement says Medicare Part D excludes over-the-counter products.
The agreement says that, absent a meaningful difference between the prescription and nonprescription versions of Pataday, Somerset had to update the generic’s labeling or seek to withdraw its application. Somerset’s application, ANDA 206306, was approved in December 2015.
The agreement classifies the $4 million plus interest as restitution. It resolves specified civil claims based on payment by mistake and unjust enrichment once the government receives payment. Somerset also agreed not to seek payment for covered billings from beneficiaries, their sponsors or third-party payors.
The agreement preserves potential liability under the False Claims Act, criminal and tax laws, and certain administrative actions. Somerset did not admit liability. The DOJ said the settled claims remain allegations, subject to any admissions in the agreement, and that liability has not been determined.
Assistant Attorney General Brett A. Shumate of the DOJ’s Civil Division said, “When companies cause Medicare to pay for products that are not eligible for coverage, the Department will act decisively to remedy that misconduct.” Payment is due within 10 business days of the agreement’s effective date.
