$14k fee distillers faced for producing hand sanitizer waived

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(NewsNation Now) — Early in the pandemic when hand sanitizer was hard to find, distilleries across the country stepped up by putting their equipment to work producing thousands of gallons of disinfectant.

Distilleries were facing a $14,000 fee due in February, standard for pharmaceutical companies that sell over the counter products. The untimely bill was sent out earlier this week. According to the CARES Act, the money is supposed to fund the FDA’s regulatory activities.

Thursday evening, the U.S. Department of Health and Human Services directed the FDA to waive the fee. It appears to be a universal waiver for all similar facilities.

“To get a bill from government now is really a slap in the face,” said Eric Gregory, president of the Kentucky Distillers’ Association told NewsNation affiliate WDKY earlier Thursday.

HHS officials said after many conversations with lawmakers and key agencies, they have withdrawn the Notice published in the Federal Register regarding OTC Monograph Drug Facility Fees and directed the FDA to cease enforcement of these fees. 

“Because HHS OGC has determined the notice is really a legislative rule and that no one at FDA has been delegated authority to issue such a rule, the notice is void. HHS leadership, based on this legal opinion, has ordered the Federal Register Notice to be withdrawn from the Federal Register, meaning these surprise user fees will not need to be paid. Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so,” said Brian Harrison, HHS Chief of Staff in a statement. “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!”

“If it’s left untouched, it’s not going to be pleasant. A lot of people, especially the small guys, are going to exit the business,” Jeff Irons, the owner of Huntsville-based Irons One Whisky Distillery, told NewsNation affiliate WHNT before the HHS directed the FDA to waive the fee.

Thursday was also the deadline for businesses to go online and unselect their hand sanitizing ambitions or face more FDA fee’s in 2022.

For the most part, distilleries stopped or slowed hand sanitizer production down several months ago when national supply stabilized.

“I started getting all sorts of phone calls from people saying, hey do you need hand sanitizer? Because we have it by the train load. I was going, I think I’ll stop making it now,” said Irons.

National distillery groups were urging businesses to hold off on paying the $14,000 fee while they worked with lawmakers and the FDA. The American Craft Spirits Association says the aforementioned task proved difficult because of the holidays.

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