Despite stepping forward to produce an essential good in the middle of a global pandemic, American distillers that revamped their processes to manufacture hand sanitizer amid a national shortage have been met with a harsh consequence: a minimum $14,060 fee from the U.S. Food and Drug Administration.
The fee comes from the CARES Act, passed earlier this year, which classifies distilleries that produced sanitizer as "monograph drug facilities," meaning they qualify for fee assessments, the San Jose Valley Sun reported Wednesday.
The fee covers the administrative costs of inspections at drug-producing facilities, Entrepreneur magazine notes.
Becky Harris, president of the American Craft Spirits Association and co-owner of a Virginia distillery, says the fee came as a surprise to distillers, despite extensive work with the FDA to facilitate and ensure safety in hand sanitizer production.
"We worked with the FDA to get companies registered and to make the rules clear to them," Harris told Entrepreneur. "At no point was the specter of an upcoming fee highlighted in their guidance, especially one of the scale announced."
Distillers that retain their status as a monograph drug facility into 2021 will be subject to the same fee in the new year, despite just learning about the existence of the fee in late December.
Leaders of the craft distillery industry are asking the FDA to eliminate the fees for distillers. The American Craft Spirits Association has said it understands the CARES Act provision was not meant to target hand sanitizer producers.
But the fee has provoked some angry response.
"At the beginning of the pandemic the FDA and our communities called out for help and distillers enthusiastically stepped up to the plate and provided an essential product to medical workers and first responders," said Aaron Bergh, who owns Calwise Spirits in California. "It's apparent the FDA has decided they don't need us anymore and it's in their best interest to suck us dry when we're already struggling during the pandemic's business closures."