HHS Calls For Halt On Fees That Would Have Charged A Charlotte Distillery $14,000 For Making Hand Sanitizer
Updated Jan. 1, 4:25 p.m.
On the evening of Dec. 31, the Department of Health and Human Services directed the Food and Drug Administration to stop the enforcement of fees to distilleries that made hand sanitizer.
"Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so," said HHS chief of staff Brian Harrison, in a statement posted on Twitter. "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!"
“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!” (2/2)— HHS Office of Public Affairs (@SpoxHHS) December 31, 2020
When Liz and Andrew Porter of Charlotte shifted their distillery to making hand sanitizer, they thought they were doing their civic duty in a pandemic. Thursday they learned the federal government plans to bill them $14,000 for their effort.
Think back to the early days of the coronavirus pandemic: Everyone was being told to use hand sanitizer with alcohol, but the shelves quickly emptied.
The Porters, co-owners of Doc Porter’s distillery, joined a national trend: They took the ethanol they’d normally use for vodka and gin and started making sanitizer. Liz Porter says they were glad to do it, "because it felt like we were called into battle to help our community."
They started with a corporate grant to cover costs, and offered their sanitizer at no charge.
"And the demand was overwhelming," Liz Porter recalls. "We were getting hundreds and hundreds of requests from qualified organizations -- I mean, these were not people you’ve never heard of. This was Atrium Health, this was Novant Health, this was CMPD."
When the corporate funding ran out, they set up a “buy one, give one” program, charging the big organizations that could pay and continuing to distribute free to smaller groups.
Need Abates, Challenges Remain
By June the big manufacturers had caught up with demand, and the Porters stopped making hand sanitizer. They later shut the doors to their distillery in Charlotte’s lower South End and tried to figure out what the future might hold.
On the morning of New Year’s Eve, the Porters started hearing national reports: The Food and Drug Administration was assessing a $14,060 fee for companies that took part in the speeded-up process for getting supplies out during the pandemic.
When the CARES Act set up that process, it said there would be an industry fee to help pay for regulatory action. But it didn’t say how much that fee would be. The Porters registered with the FDA, but they say it was never clear that they’d be considered part of the industry paying for over-the-counter drug regulation.
"We don’t want to compete with Johnson & Johnson on hand sanitizer. We just wanted to make sure that our police had a bottle of it in their car and our firemen were safe," Liz Porter said.
"All our first responders that were really exposed at the beginning," Andrew Porter added.
But when the fees were posted at year's end, it said those who made hand sanitizer during the crisis were included.
Hoping For Reprieve
The Porters say they were shocked -- and a bit panicked -- to learn they’d owe $14,060 by Feb. 12.
The timing was especially bad: The Porters had laid off their only two employees, and New Year’s Eve was their last day being paid.
The Porters have other careers -- she’s in sports marketing and he’s a chemical engineer. They haven’t gotten a bill from the FDA yet, and when they do they plan to hold off paying it. They hope news coverage of the surprise bill -- and lobbying from a craft spirits trade group -- get the fee reversed.
But Andrew Porter says they took one action quickly: They canceled their FDA registration. They don’t want to get another big bill at the end of 2021.