FDA backtracks on hand-sanitizer fees

As the fear of coronavirus swept the world, panic buying went into full swing. Suddenly, toilet paper and hand sanitizer became hot commodities that were difficult to find. The high demand for these products, and limited workforce availability because of the virus, resulted in severe shortages as companies were unable to meet the increased demand.

Fortunately, the United States is home to thousands of breweries and distilleries that had the ability to turn alcohol originally meant for consumption into a usable denatured hand sanitizer. When demand for hand sanitizer skyrocketed, several distilleries stepped up to the plate and implemented novel processes to mass produce the much-needed sanitizer. Virtually overnight, these companies produced, packaged, and delivered thousands of bottles of hand sanitizer to the American people. 

For their patriotic efforts, this is how these companies were thanked: the U.S. Food and Drug Administration (FDA) released new regulations and fees for organizations operating as “monograph drug facilities” -- producing over-the-counter drugs. This includes the hundreds of distilleries that stepped up, putting profits aside to mass produce hand sanitizer. For the fiscal year of 2021, the FDA fees for hand sanitizer producing facilities is $14,060. 

Keep in mind that many of these companies disregarded their own bottom lines and instead produced sanitizer at cost or donated it. Without these companies producing the amounts of hand sanitizer they did in an efficient manner, our nation could have been far worse off. Even if the distilleries donated the product they produced, these companies would still be on the hook for the $14,000.

Let’s not forget that the government shutdowns resulted in thousands of small businesses closing their doors, while big box stores remained open. According to one estimate, 60 percent of businesses that shut down due to the pandemic are now permanently closed. Imagine being a business owner, trying to keep your business afloat, and instead choosing to forgo profit for the greater good by producing sanitizer the country needs. These company leaders deserve medals, not government fees. 

Fortunately, the FDA realized their blunder after public opposition to the outrageous fees. The FDA did reverse the decision and revoked the fees on distilleries that voluntarily served communities during the pandemic.

According to Health and Human Services Chief of Staff Brian Harrison, "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!"

Clearly, the FDA did the right thing by revoking the fees on distilleries that helped during the pandemic. However, the FDA’s penchant for overregulating is a problem that exceeds this situation. Had the FDA implemented the ill-advised fees on the distilleries, it is extremely unlikely that private businesses would be as willing to help in future emergencies. 

In the future, the FDA ought to think about the long-term consequences of petty decisions to raise revenue by penalizing businesses that are simply trying to do the right thing. 

Christina Herrin (cherrin@heartland.orgis the government relations manager at The Heartland Institute, a nonpartisan, free-market think tank headquartered in Arlington Heights, Illinois.

Image: FDA