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PATCHOGUE, NEW YORK – APRIL 01: The first bottles of hand sanitizer are shown which were produced … [+]
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On December 29th as part of the CARES act, the FDA issued a set of two fees to craft distillers that created hand sanitizer during the pandemic. The reasoning was a newly-established “OTC monograph drug user fee program.” The program would require distilleries to pay a $14,060 Monograpah Drug Facility Fee as well a $9,373 Contract Manufacturing Organization Facility Fee.
Beyond the simple fact that $23,000+ is a ton of money for a small business, especially during a pandemic, the fee was also to be due almost immediately: on February 11. If distillers, who didn’t know about the fee at all until the 29th, didn’t stop selling sanitizer and de-register themselves from the FDA eDRLS system by the 31st, then they would also be changed the same fee again in 2022.
Last night, the Federal Government made the decision to reverse the fee. In a statement posted to Twitter, Brian Harrison, the Health and Human Services Chief of Staff said: “Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so. I’m pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees. Happy New Year, distilleries, and cheers to you for helping keep us safe!”
For distillers, many of which made hand sanitizer as a way to give back to their communities during a difficult time, not make a profit, the announced was a welcome relief in the final moments of 2020.
“On behalf of distillers across the country, thank you HHS leadership for intervening and supporting these small businesses to do their part to keep our communities safe,” Chris Swonger, President & CEO of the Distilled Spirits Council said in a subsequent tweet along with sharing the official HHS announcement.
Beyond the work involved in actually making hand sanitizer, making taht hand sanitizer to adhere to FDA guidlines also wasn’t easy. On March 18 the TTB encouraged distillers to make sanitizer, saying they could do so without prior approval as long as they followed WHO guidelines; however, on March 29 the FDA declared that the hand sanitizer needed to be made with denatured alcohol, something distillers did not already have on hand. Denaturing agents were scarce at the time, and denaturing the alcohol, which is not recommended by the WHO, caused the cost and time associated with creating the hand sanitizer to go up.
Swonger reinterated his statements from Twitter in an official statement on the Distilled Spirits Council’s website:
“This is such a relief to hundreds of distillers. We want to thank HHS leadership for quickly intervening and protecting distillers from these unwarranted fees. Distillers were proud to help make hand sanitizer for their communities and first responders during their time of need.”