During a public health crisis, distilleries across the country pumped out the hand sanitizer to cover a nationwide shortage.
Now the same distilleries are being told to pay more than $ 14,000 to the Food and Drug Administration (FDA) for the manufacture of over-the-counter drugs without a proper license.
“I feel like the FDA welcomed me when they needed me. Now they let me out on the road,” said Calwise Spirits & Co., the owner of the distillery. Aaron Bergh said.
For distilleries such as Calwise Spirits & Co. in Paso Robles, disinfection was an opportunity to bring employees back and avoid bankruptcy during the pandemic.
He says in March, the FDA asked the distiller for help in manufacturing more products and abandoned the registration and approval process to get disinfectants out quickly.
In a six-week period, Bergh and his team made more than 5,000 gallons of germicidal formula and sent it across government agencies to government agencies and front-line workers.
Now he and nearly 800 other distillers in the U.S. owe $ 14,080 to the FDA as facility fees.
“I feel like no good deed goes unpunished,” Bergh said. “What I could do was what others did and did not register with the FDA and started registering it, but because I followed the rules and registered, I am now audited and taxed.”
Shock and frustration run through the industry.
“There must be a mistake. We’re the good guys. We’re the guys who [the FDA] wanted us to help and we jumped in and helped, ”said Eric Olson, owner of Central Coast Distillery. “That was our whole purpose and there was no question that we would have to pay later to help.”
The CARES law passed in March changed the regulation of non-prescription drugs, allowing distilleries to manufacture the product according to FDA guidelines.
Under the review, however, distilleries are classified as ‘over-the-counter drug facilities’, meaning business owners will have to pay the associated fees for the February 12 financial year.
The US Department of Health and Human Services tweeted on Thursday night a recommendation that the FDA “should stop maintaining these arbitrary, surprising user fees”. However, there has been no response from the FDA yet.
BREAK: @HHSGov Act quickly to protect small businesses from arbitrary fees
Statement by Brian Harrison, Chief of Staff of HHS
‘Small businesses that have acted to fight COVID-19 should be applauded by their government and not taxed for it. (1/2)
HHS Office of Public Affairs (@SpoxHHS) 31 December 2020
Olson says many distillers have lost money or even sold disinfectants.
Many local business owners like him even donated bottles to homeless shelters and first responders.
“It was such a rush to get started. No one even tried to make money. These guys were just trying to get it out of people’s hands. “I mean, honestly, it was benevolence,” Olson said.
In an email to KSBY, an FDA spokesman said the information about the fee had already been posted on the agency’s website in May. On Tuesday, December 27, it announced how much the fee would be.
In a statement, the FDA said it’s appreciating the industry’s willingness to help market alcohol-based hand sanitizers to meet the growing demand for these products during COVID-19, and we are grateful for their efforts. manufacturers have the fees they are asked to pay, especially from small businesses in this difficult time. ‘
Distillery owners have until the end of 2020 to decide whether they want to continue the disinfection production in the new year, which will cost them another $ 14,000 in registration and facility fees.
For Bergh, it’s not worth it.
‘This morning I had to cancel my FDA registration. “I would like to stick to it, so I have everything ready if there is still a big shortage and we can start manufacturing, but the FDA is creating too much risk,” Bergh said.
The Distilled Spirits Council of the United States said in a press release that the FDA’s announcement comes without warning and that they are requesting the agency to waive these fees.