Regulation

In a Last-Minute Reversal, HHS Voids FDA Fees on Distillers Who Produced Emergency Hand Sanitizer

Thanks to coverage at Reason and pushback from the industry, the federal government voided $14,000 fees on do-gooder craft distillers just in time for the new year.

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It's been a whirlwind 24 hours for American craft distillers, but 2020 is ending with some good news: Thanks to media coverage, including here at Reason, of an unexpected and substantial fee imposed by the Food and Drug Administration (FDA) on distillers who pivoted to produce much-needed hand sanitizer, the federal government has reversed course on what would have been a devastating blow to small businesses.

In the early days of the COVID-19 pandemic, many distillers shifted their production from spirits to hand sanitizer, complying with emergency guidance from the FDA. Much of this sanitizer was donated or sold at a low margin, helping to alleviate a dire shortage. These same distilleries were surprised this week by a notice from the FDA informing them that they were required to pay a fee of more than $14,000 as over-the-counter drug production facilities to cover the costs of FDA regulation. 

Late today, however, the Department of Health and Human Services (HHS) reversed the policy. In a statement posted to Twitter, HHS Chief of Staff Brian Harrison said, "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!"

In a longer statement, HHS leadership distanced itself from the initial policy: "This action was not cleared by HHS leadership, who only learned of it through media reports late yesterday. HHS leadership convened an emergency meeting late last night to discuss the matter and requested an immediate legal review. The HHS Office of the General Counsel (OGC) has reviewed the matter and determined that the manner in which the fees were announced and issued has the force and effect of a legislative rule. Only the HHS Secretary has the authority to issue legislative rules, and he would never have authorized such an action during a time in which the Department is maximizing its regulatory flexibility to empower Americans to confront and defeat COVID-19."

The statement continued: "Because HHS OGC 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."

The news was greeted with relief by the craft distilling community. "I am immensely appreciative of the outreach and quick action of HHS leadership, especially Chief of Staff Brian Harrison," says Becky Harris, president of the American Craft Spirits Association (ACSA) and of Catoctin Creek Distilling Company in Purcellville, Virginia. "The American Craft Spirits Association team and distillers around the country have been immensely helped by the outreach from the media, legislators, and our customers expressing their shock and disappointment at this notice, and helping us get the ear of people within the federal government in a position to help. This New Year's Eve I am raising a glass in gratitude, relief, and toasting the prospect of a better 2021."

Aaron Bergh of Calwise Spirits Co. in Paso Robles, California, struck a similar note. "The FDA's announcement at the beginning of this week was set to wipe out our holiday-season profit," he says, relieved. But "there are still some concerns that remain," such as whether distilleries will be charged if they continue making sanitizer in 2021.

Nonetheless, he's grateful for the outcome. "Thanks to speaking out and fighting the power, we've found ourselves the recipients of a New Year's miracle.…Thank you to all who stood up for us—our voices were clearly heard."

At the end of a rotten year, at least we can toast to the fact that, in this one instance, the federal government fixed a mistake before it was too late.

NEXT: L.A.'s Reformist D.A. Promised To Eliminate Hate Crime Enhancements—Until Progressive Activists Gave Him a Call

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  1. Government will find another way to crush them.

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  2. That’s good news. In Vino Libertas!

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  3. “Thanks to coverage at Reason and pushback from the industry, the federal government voided $14,000 fees on do-gooder craft distillers”

    Lmao awwww

    Sorry, i know youre hungry for reference, but reason likely had zero influence on this. Its kinda cute though.

    1. Im just amazed Sullum got through the article without mentioning Bad Man Trump.

      1. Grier, damn so much for my reading comprehension. Guess im the one with obsession problems

      2. I had to check; there was no way Sullum could have written this without some reference to orange-man-bad.

        1. He just left put the orange man good part of who rescinded the fees.

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      3. Did he mention it was trumps political appointee who over turned the career officials?

    2. You don’t know the difference between “reference” and “relevance” but you feel equipped to snark anyway?

      1. Did you have a point? Not obvious from your snark.

      2. It was about reason trying to “take reference” for the subject of this article. Pretty obvious, unless you’re snorkeling away in your snark.

        1. It was about reason trying to “take reference” for the subject of this article. Pretty obvious

          It’s also gibberish.

          1. Are you one of the people who run this site and butthurt by chance? 😀 it is true, reason is irrlevant, and they have not contributed anything here, even though they wanna have the reference for it (really obvious).

            Just learn English old man, then it will cease to be gibberish for you. 😉

            1. Just learn English

              You first, dipshit.

              1. I understand you are upset somebody pointed out your errors, as English may not be your first language. 😀 That is okay though. Even in old age, people can learn. 😉

              2. To the people in this thread who are not still learners but users of the language, what I was saying made immediate sense. This league of comprehension may not be entirely inaccessible for you if you try hard enough. 😉 Your name calling reveals great anger and shame though, and it would make me sad for you, weren’t you so unimportant and just amusing as a character. 😀

      3. Guess I should have just said they’re hungry for credit so you get it. In no case does this change anything about reason not having anything to do with the unexpected liberation of distillers.

    3. It probably did though. It was one of the articles linked on Drudge yesterday about the subject. Malign it all you like but Drudge drives eyeballs like you wouldn’t believe.

      1. Not anymore. Their readership is way down since he sold.

    4. I disagree. Thanks goes to reasons coverage of this.

      I may criticize reason and mock their leftist influence, but this time they really were a great service to the small business community.

      1. What kind of reach do people think this internet curiosity of a website has? A website where users are so scarce that you can guess sock puppets from the way they write and where without socks and bots and the active user base would probably shrink by 50 percent or more. I like the different perspectives you get here, but, uhm, yea, you guys arent relevant. 😛

        1. Should stop typing on my phone. But then it doesnt matter what i do because i would be the outlier if i took this website seriously. Super unprofessional with the bots

  4. sorry but you reason koch suckers weren’t relevant it played elsewhere in more important publications.

    1. Funny, because the distillery groups gave him credit and other publications cited his work.

      Too bad you’re just a petty, petty person, proudly broadcasting how bad and immoral you are. Hopefully you are a better person in real life than the jerk you play on the Internet, but given the examples of similar Internet assholes like Trump, it is difficult to have hope.

      1. “Funny, because the distillery groups gave him credit and other publications cited his work.”

        Gave who credit for what?

      2. If online behavior were representative of our overall character, the Cuban Missile Crisis turned out the wrong way.

  5. SleepyJoe made a few calls. Took care of it.
    From his basement.

    1. Sleepy joe would have made a few calls all right, but to the media to bury the story.

      It’s not that he has anything against the distillery industry, but the bureaucracy uber alles.

  6. Yeah, now cancel all the other eleventy jillion bullshit regulations you pigfuckers.

  7. Congratulations, fantastic work. The ultimate victory for a journalist, and so quickly. That statement by HHS is something too, distancing themselves.

    1. ^THIS; I fear after Biden selects his cabinet the secretary of the HHS is no longer going to have the opinion that the American people can/should be able to supply solutions for themselves.

  8. …Thanks to media coverage, including here at Reason,..”

    Got any evidence that Reason’s coverage had any effect at all? You guys got $100 this year, chump-change for a chump outfit.
    IJ also got pennies this year; they seem to think the current power-grab by the various government bodies are not really important.
    These guys: https://pacificlegal.org/donate/ are actively engaging the tin-pot dictators who have gained power this year and are not likely to give it up easily.
    If you are giving to those who support liberty, they are doing so.

    1. Good stuff there. It’s too bad the ACLU doesn’t live up to its name or do their job anymore.

  9. Happy New Year, Reason, from the only time zone that matters,

    1. Guam?

    2. Test

    3. Oh wow

  10. I’m sure the legal review was done with all the care we expect from a Trump administration lawyer whose boss has told him the answer ahead of time. But at least it turned out right in the end.

    1. This sort of thing was already anticipated by them. Read the end of the Trump’s signing statement on the CARES Act.

  11. Good example of why we have a free press. This was a simple problem. Reason and other press got it coverage. The people who make the decisions responded appropriately.

    The system works.

    1. Bullshit. You were tepid, just people following orders. You don’t get to clap and sing now.

    2. “The system works.”

      A perfectly good generalization, at least according to Democrat standards of evidence.

      1. 1 victory put of 100 thousand is about what the cosplay libs here want. They want just enough to satiate the masses, this time rescinded 14k fees while a sbit tom of new regulations go through under uncle Joe next year. It is a farce.

        1. Nah dude, it’s ok to celebrate small victories and still not be a prog boot licker.

  12. “Only the HHS Secretary has the authority to issue legislative rules”

    If that’s true, why this kerfuffle in the first place?

    1. The issue was a (presumably unintended and unforeseen) side-effect of a provision of the CARES Act. It was not something that the FDA chose to impose.

      1. Oh no, I’m certain they chose it intentionally. Petty little tinpot-dictator bureaucrats gotta dictate their decrees, gotta give themselves the delusion they’re doing something of value. Which is why their inflated egos need to be popped frequently and publicly.

        1. Oh no, I’m certain they chose it intentionally.

          It always amazes me how “sure”/”certain” people declare themselves to be about something when it’s obvious they don’t have the faintest idea what the hell they’re talking about. You don’t even know what “it” is, or what provision created the fee. If you did, you wouldn’t be claiming that the drafters of that provision were just sitting around, stroking their chins saying to each other, “How can we screw over small distillers and brewers who might at some point after this bill is passed start manufacturing hand sanitizer, assuming such a thing ever happens?”, or anything else so asinine.

          I like dumping on Congress critters (and other politicians) as much as anyone else, but try not to be a complete idiot about it.

          1. You sound butthurt people can say whatever they want. Its called free speech. 🙂 Get over it and iron the wrinkles from time to time.

            1. What are you, 5 years old?

              I mean, not that you sound that bright.

              1. LOL The old, wrinkly man is upset that the younger generation sees right through him being butthurt about the existence of free speech. Please monitor your blood pressure when reading this. 🙂 Reality hurts, but you can improve on your English skills if you try hard enough. Then you will also be able to read and understand the constitution. 😉 It talks about free speech, among other things.

  13. “Because HHS OGC 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.”

    Since this is the case for just about all Gov agencies, does this create a precedent to ignore them?

  14. Never fear! Good ‘ol Working Class Joe Biden from Scranton has promised to rescind such unjust, crony-capitalist give-aways to business on Day 1!

    Those filthy rich micro-distillers will pay their fair share!

  15. >Thanks to coverage at Reason

    Hallucinate much?

    The FDA is Dementia Joe, the HHS is Trump. Enjoy the next four years.

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  17. Goddamn. Here we have a feel-good article about the government briefly taking its boot off the necks of producers. And the comment section is immediately beset with Trump obsessed idiots making it all about him. It seems to color their every thought. And I voted for him too, but somehow my mind still works.

    These people have been shitting on the comment section for so long now we’re ankle deep in it. I’ve been around here for probably 15 years (was it going in 2005?). I stayed through the “glibining” and other weirdnesses. I’m sure this will also morph into something else.

    1. Did you notice the author who had 40 some articles about one concept the last month dummy?

    2. I’m hoping that as their idol recedes into history, the Trump fans leave _Reason_ commenting to libertarians.

  18. You are looking at a demonstration of spoiler vote clout. The thought of distillers shunning the abusive kleptocracy to instead finance Libertarian campaigns is more than the looters care to consider or risk. Argentina, land of the current Pope, has like Ireland and Italy, scrapped its girl-bullying birth control bans, and American voters put 19th Amendment clout behind their support for the 9th, 13th and 14th Amendments. Republicans are gonna haveta lose the rednecks with green teeth the way they are scraping off the Klan, Comstockers and Anti-Saloon League. It’s either that or be thrown out of office. Which will it be?

    1. big·ot
      /ˈbiɡət/

      a person who is obstinately or unreasonably attached to a belief, opinion, or faction, especially one who is prejudiced against or antagonistic toward a person or people on the basis of their membership of a particular group.

  19. Poor commies at unreason.

    Trump forced his executive branch democrat bureaucrats to void fees.

    Federalist did an article on it.

  20. I commented here on new years eve and now I come back 3 days later and this article is still the center of this website, like they are celebrating it as their biggest achievement. 😀 Awwwww so cute

    I know reason is desperate to put anything positive or useful on their curriculum, but sadly they won’t get the reference for this (maybe the learners of English we have in here will understand what I meant if I put it this way).

  21. #RogerStoneDidNothingWrong
    #ReasonDidNotSaveDistillers

    A sip of reality. No calories. Only flavor.

  22. The vaccine story has pushed many pharma company stocks to all time highs, provided with opportunity for their executives to dump their shares. The play was evident and now FII, DII PRO Data finally shows Reversal which will simply trap the retail investors.

  23. The deep state is real…

    “This action was not cleared by HHS leadership, who only learned of it through media reports late yesterday…Because HHS OGC 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.

    SOMEONE had to authorize it, post the notice in the Registry, etc. Who did all that?

  24. This is where “black markets” come from.

  25. Libertarian moment!

  26. This is good news! Glad to see that his fees were redacted.

    Jerry from https://www.bedrocktreeservice.com

  27. Looks like the apparatchiki didn’t like the attention. Lots of people were asking how the fuck the FDA ever got jurisdiction over something that’s neither food, nor a drug, nor a medical device.

    -jcr

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