SPOKANE, Wash — Spokane’s Dry Fly Distillery was one of many distilleries around the country who stepped in to help make hand sanitizer at the start of the pandemic and was shocked this week when they learned they’d receive a fee for it.
There was fear that the fee could force the closure of some small distilleries. However, the Department of Health and Human Services announced Thursday it will not require them to pay the surprise fee.
Dry Fly was told they would have to pay over $14,000 for making what's considered an over-the-counter drug.
They posted about the fee on social media and the response was enormous. The Spokane Quaranteam, a group who raises money to buy hundreds of meals at a local business, even offered to pick up the tab
“We were as surprised as anybody in our industry to be quite honest,” Dry Fly Vice President of Operations Patrick Donovan. “I mean, it was, we had kind of heard a little bit of rumblings about it, literally like a day ago.”
Donovan said the ‘Spokanitizer’ project, as they called it, was really hard but very gratifying because the outpouring of support from the community was incredible.
“I'm not sure I've been more proud of Dry Fly ever, in terms of things that we've done outside of this year,” he said.
Donovan said the company gave up more than $100,000 worth of whiskey production to produce the hand sanitizer.
“We're better suited to deal with it,” he said. “You know, a lot of our compatriots in this industry, they may not be and that's really difficult for them.”
Dry Fly has continued to make the hand sanitizer and even got a contract with a local school district to distribute the sanitizer to them.
Donovan said they are not struggling financial and he asked those in the community who want to help, to support local restaurants.
“If they want to find an outlet to donate or send their money to check out Spokane Quaranteam and Rick Clark and all the good stuff he's doing for our local bar and restaurants. That'd be very cool. It would mean a lot to us here,” he said.
USA TODAY reports that under the CARES Act passed in March, there was a non-prescription drug policy that made distilleries that produced hand sanitizer "over-the-counter drug monograph facilities." Under the CARES Act, those facilities were required to pay fees under the monograph drug user fee program.
Those included the $14,060 Monograph Drug Facility Fee and a $9,373 Contract Manufacturing Organization Facility Fee. Those fees were set to come due on Feb. 11, 2021, according to the Distilled Spirits Council.
Late Thursday, HHS Chief of Staff Brian Harrison released a statement that the fees would be forgiven.
“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!" HHS tweeted.