During a public health crisis, distilleries across the country pumped hand sanitizers to cover national shortages.
Distilleries themselves are now being told to pay more than $ 14,000 to the Food and Drug Administration (FDA) to make over-the-counter drugs without a proper license.
“I think the FDA welcomed me when they needed me, now they leave the door closed on the way out,” said Aaron Bergh, owner of Calwise Spirits & Co. distillery.
For distilleries like Calwise Spirits & Co. of Paso Robles, making disinfectants was an opportunity to recover employees on the runway and prevent bankruptcy during the pandemic.
He says that in March, the FDA asked distillers for help in getting help to make more products and gave up the drug registration and approval process to quickly remove the disinfectant.
Over a six-week period, Bergh and his team manufactured more than 5,000 gallons of the formula to kill germs and sent it statewide to government agencies and front-line workers.
Now, he and about 800 more distillers in the U.S. owe $ 14,080 to the FDA in facility fees.
“It seems to me that no good action goes unpunished,” Bergh said. “What I could have done was what the others did and not register with the FDA and start doing it without registering, but because I followed the rules and registered, I’m now auditing and I’m being taxed.”
Shock and frustration are spreading through the industry.
“It simply came to our notice then. We are the good ones. We are the guys who [the FDA] we wanted us to help, and we came in and we helped, “said Eric Olson, owner of the Central Coast Distillery.
The CARES law passed in March changed the regulation of over-the-counter medications, which allowed distilleries to manufacture the product according to FDA guidelines.
However, according to the review, distilleries are classified as “over-the-counter drug establishments,” meaning business owners must pay the associated fees for the fiscal year before Feb. 12. .
On Thursday evening, the U.S. Department of Health and Human Services tweeted about the recommendation that the FDA “stop applying these arbitrary and surprising fees to users.” However, there has been no response from the FDA yet.
BREAKING: @HHSGov It acts quickly to protect small businesses from arbitrary fees
Statement by Brian Harrison, Chief of Staff of HHS
“Small businesses that intensified the fight against COVID-19 should be applauded by their government, not forced to do so. (1/2)
– HHS Office of Public Affairs (@SpoxHHS) December 31, 2020
Olson says many distillers lost money or even stopped selling disinfectants.
Many local businessmen like him even gave bottles to shelters for the homeless and first aid.
“It simply came to our notice then. No one even tried to make money. These guys were just trying to get it into the hands of the people. I mean, honestly, it was goodwill, ”Olson said.
In an email to KSBY, an FDA spokeswoman said the rate information was posted on the agency’s website in May. On Tuesday, December 27, he announced how much the fee would be.
In a statement, the FDA said it “appreciates the industry’s willingness to help supply alcohol-based hand sanitizer to the market to meet the growing demand for these products during COVID-19, and we are grateful for their We understand the concern that manufacturers have about the fees they are being asked to pay, especially for small businesses at this difficult time. “
Distillery owners have until the end of 2020 to decide if they want to continue disinfectant production in the new year, which would cost them another $ 14,000 in registration fees and facilities.
For Bergh, it’s not worth it.
“This morning I had to cancel the FDA registration. I would have liked to hold on to it, so I have everything ready in case there’s another massive shortage and we can start manufacturing, but the FDA created too much risk, ”Bergh said.
The U.S. Distillated Spirits Council said in a press release that the FDA announcement came without warning and urged the agency to waive those fees.