U.S. Distilleries Making Pandemic Hand Sanitizer Get Fee Relief

U.S. distilleries and other businesses that began making hand sanitizer as the coronavirus pandemic gripped the country have gotten a reprieve from thousands of dollars in user fees normally imposed on companies that produce medical products.

The craft beverage industry, primarily made up of small businesses, got unwelcome news in the Federal Register this week, after the U.S. Food and Drug Administration indicated that it planned to charge fees of as much as $14,000 to companies that made hand sanitizer. The product normally is considered an over-the-counter drug, and regulated by the FDA.

A legal review by the Department of Health and Human Services has now found that the way the fees were announced and issued was inappropriate, constituting a legislative rule that only the HHS secretary is allowed to make, the department said in a statement on Thursday evening.

HHS, according to the statement, has determined that the notice is void, ordered that the Federal Register posting be withdrawn and said the surprise user fees need not be paid.

“Small businesses who stepped up to fight Covid-19 should be applauded by their government, not taxed for doing so,” Brian Harrison, chief of staff at HHS, said in the statement. “I’m pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees.”

Asked for comment Thursday after regular business hours, the FDA said it was closed until Monday and could not respond until then.

With hand sanitizer vanishing from store shelves as the coronavirus took hold across the U.S. early this year, distilleries and breweries, facing a steep drop in business, started making the product.

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