Somerset Lifesciences will pay $4 million plus interest to resolve US claims that its eye-drop labelling caused Medicare to fund a product that should no longer have been covered as a prescription drug.
The Justice Department announced the settlement on October 16. It concerns olopatadine hydrochloride ophthalmic solution, the generic version of Pataday Twice Daily Relief, and the consequences of the brand-name drug’s 2020 switch to over-the-counter sale.
The government says Somerset continued marketing its version as prescription-only after the change. Medicare Part D generally covers drugs available only on prescription, not products sold over the counter.
The agreement identifies the disputed period as February 14, 2020, to October 17, 2023. Its background recitals state that Somerset continued selling the product with prescription-only labelling after federal law required updated labelling or withdrawal of its approval application.
The legal release is narrower than a general fraud settlement. On receipt of payment, the United States releases specified civil monetary claims based on payment by mistake and unjust enrichment.
The document expressly reserves potential False Claims Act, criminal, tax and certain administrative liabilities. It therefore should not be read as an across-the-board release of every possible federal claim.
Somerset does not admit liability under the agreement. The Justice Department says the resolved claims remain allegations except for admissions contained in the document; no court determination of liability is announced.
The $4 million is designated restitution. Somerset also agrees not to shift the covered billings to health-care beneficiaries or other listed payers, and not to charge the government for specified settlement and investigation costs.
