US removes fee for distillers making hand sanitiser

The US Department of Health and Human Services (HHS) has withdrawn a recent US$14,060 fee for distillers that produced hand sanitiser during the Covid-19 pandemic.

On 29 December, the US Food and Drug Administration (FDA) announced it would impose fees on distilleries and other facilities that produced hand sanitiser during the pandemic.

The FDA announced that distillers would be ordered to pay a US$14,060 Monograph Drug Facility Fee, which was due on 11 February 2021.

However, just days later, the HHS said it had withdrawn the notice for the charge and directed the FDA to cease enforcement of these fees.

In a statement, HHS chief of staff Brian Harrison said the FDA’s action was not cleared by HHS leadership, “who only learned of it through media reports”. As such, the government department ordered an immediate legal review and determined that the manner in which the fees were announced and issued “has the force and effect of a legislative rule”.

According to the statement, only the HHS Secretary has the authority to issue legislative rules, and “he would never have authorised such an action during a time in which the department is maximising its regulatory flexibility to empower Americans to confront and defeat Covid-19”.

As such, the order has been withdrawn and “these surprise user fees will not need to be paid”.

Harrison said: “Because HHS OGC [Office of the General Counsel] has determined the notice is really a legislative rule and that no one at FDA has been delegated authority to issue such a rule, the notice is void. HHS leadership, based on this legal opinion, has ordered the Federal Register Notice to be withdrawn from the Federal Register, meaning these surprise user fees will not need to be paid.

“Small businesses who stepped up to fight Covid-19 should be applauded by their government, not taxed for doing so. I’m pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees. Happy new year, distilleries, and cheers to you for helping keep us safe.”

The move has been welcomed by US trade bodies including the Distilled Spirits Council of the US (Discus) and the American Craft Spirits Association (ACSA).

Discus president Chris Swonger said: “This is such a relief to hundreds of distillers. We want to thank HHS leadership for quickly intervening and protecting distillers from these unwarranted fees. Distillers were proud to help make hand sanitiser for their communities and first responders during their time of need.”

Becky Harris, president of the ACSA and president of Catoctin Creek Distilling Company, added: “We are incredibly grateful to HHS for opening a dialogue with us, and look forward to working more collaboratively together in 2021 with FDA to ensure our members are treated fairly for the challenges they face to support their hometowns via hand sanitizer production in the wake of Covid-19.”