Central coast distilleries face $ 14,000 FDA fee for making hand sanitizers

During a public health crisis, distilleries across the country pumped hand sanitizer to cover a national shortage.

These same distilleries are now being instructed to pay more than $ 14,000 to the Food and Drug Administration (FDA) to make drugs without proper licensing.

“I feel like the FDA welcomed me when they needed me, now they are letting the door close on my way out,” said Aaron Bergh, owner of the Calwise Spirits & Co. distillery.

For distilleries like Calwise Spirits & Co. in Paso Robles, making disinfectant was an opportunity to bring back licensed employees and prevent bankruptcy during the pandemic.

He says that in March, the FDA asked distillers for help in making more products and waived the registration and approval process for drugs to release the disinfectant quickly.

In a six-week period, Bergh and his team produced more than 5,000 gallons of the germ-killing formula and sent them across the state to government agencies and frontline workers.

Now he and nearly 800 other distillers in the United States owe the FDA $ 14,080 in installation fees.

“I feel that no good deed goes unpunished,” said Bergh. “What I could have done what others did and not register with the FDA and start doing without registering, but as I followed the rules and registered, I am now being audited and taxed.”

Shock and frustration are affecting the industry.

“There must be a mistake. We are the good guys. We are the guys who [the FDA] he wanted us to help and we jumped and helped, ”said the owner of the Central Coast Distillery, Eric Olson. “That was our whole purpose and there was no talk that we would have to pay later for helping.”

The CARES Act approved 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 monograph facilities,” meaning that business owners have to pay associated fees for the fiscal year through February 12.

On Thursday night, the United States Department of Health and Human Services tweeted a recommendation that the FDA “cease the application of these arbitrary and unexpected fees to the user.” However, there has still been no response from the FDA.

Olson says many distillers lost money or broke even by selling disinfectant.

Many local business owners like him have even donated bottles to homeless shelters and first aid.

“It was a hurry to start. Nobody tried to make money. These guys were just trying to get it into people’s hands. I mean, honestly, it was goodwill, ”said Olson.

In an email to KSBY, an FDA spokeswoman said the fee 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 provide alcohol-based hand sanitizer to meet the growing demand for these products during COVID-19, and we are grateful for their efforts. We understand the concern. that manufacturers have on the fees they are being asked to pay, especially for small businesses during this difficult period. “

Distillery owners have until the end of 2020 to decide whether they want to continue producing disinfectants in the new year, which would cost them another $ 14,000 in registration and installation fees.

For Bergh, it’s not worth it.

“This morning I had to cancel my registration with the FDA. I would have liked to hold on to it, so I have everything ready in case there is another massive shortage and we can start manufacturing, but the FDA has created many risks, ”said Bergh.

The United States Spirits Council said in a press release that the FDA announcement came without warning and they are asking the agency to waive those fees.