Struggling Distillers Hit With Surprise $14,000 FDA Fee for Producing Hand Sanitizer During Pandemic
Distilled Spirits Council Urging FDA to Waive Fees for Distillers Who Aided Communities in Need
WASHINGTON, DC — In a shocking turn of events, the FDA announced Dec. 29 without any advance notice that it is imposing fees on distilleries and other facilities that produced hand sanitizer during the pandemic.
“This incredibly frustrating news comes as a complete shock to the more than 800 distilleries across the country that came to the aid of their local communities and first responders. This unexpected fee serves to punish already struggling distilleries who jumped in at a time of need to do the right thing,” said Distilled Spirits Council President and CEO Chris Swonger. “While this fee may be a rounding error to a large pharmaceutical company, this will be disastrous to small distilleries who stepped up to help produce this critical product – it will quite literally bankrupt some struggling businesses. We are urging FDA to immediately waive the fees for distillers who are producing hand sanitizer on a temporary basis to help combat the pandemic, pursuant to the FDA’s temporary policy.”
The FDA made the surprise announcement in a Federal Register Notice (FRN) titled “Fee Rates under the Over-The-Counter Monograph Drug User Fee Program for Fiscal Year 2021.”
These fees are being levied under a newly established “OTC monograph drug user fee program,” which has established fees on OTC monograph drug facilities, as well as OTC Monograph Order Requests (OMORs) for FY 2021. The FDA has stated that these fees also apply to facilities, including distilleries, that produced hand sanitizer under the temporary policy during Covid-19.
The fees impacting distillers are a $14,060 Monograph Drug Facility Fee and $9,373 Contract Manufacturing Organization Facility Fee. The fees for FY 2021 are due on February 11, 2021.
In order for distillers to avoid the 2022 OTC Monograph Drug Facility Fee, they need to act today, December 31, 2020 to (1) cease producing and selling the product; and (2) de-register in the FDA eDRLS system.
Phil McDaniel, CEO of St. Augustine Distillery and Chair of the DISCUS Craft Advisory Council, added, “Everyone was totally blindsided by FDA’s announcement and as a result, craft distillers across the country are scrambling to understand and respond. Given all that’s happened in 2020, the timing of this news could not be worse. The $14,000 fee being assessed could certainly put many of these small family owned businesses out of business.”