The CARES Act provided money for people in need due to the spread of COVID-19, but it did other things as well. It funded some vaccine research, it provided money for small business loans (which was subsequently abused by many large businesses) and it attacked citizens who’d stepped up to help the country in time of need.
The last item didn’t get much publicity until a few days ago, because the people attacked weren’t aware of the broadside against them until they began receiving notices in the mail. The FDA had been directed by the CARES Act to seek cash in the form of fees for a new Over-the-Counter Monograph User Fee Program. This enacted charges of just over $14,000 for businesses which created just a single over-the-counter drug, even if they didn’t normally manufacture medicine. The primary target of this legislation were hand sanitizer manufacturers, which are regulated by the FDA as OtC drugs due to their antibacterial and antiviral effects.
At the beginning of the week, stories began to appear in the press (like this one from the Atlanta Journal-Constitution) about the surprise which had been delivered to the small distilleries which had stepped up at the beginning of the coronavirus crisis. Many of these places had foregone the profit they’d have otherwise made from manufacturing liquor and shifted their efforts toward creating desperately sought hand sanitizer until the businesses which normally specialized in such could meet the increased demand. The distillers were universally praised, particularly as many of them gave away their products for free. It was a great example of the local business communities stepping in quickly while the juggernaut of government lumbered behind them.
As of late last night, the FDA has announced that it is foregoing the collection of these fees on many of the companies that stepped up to help during the pandemic. Their website has been updated to include:
Note: Due to the COVID-19 public health emergency, FDA has established a temporary policy under which the agency will not take enforcement action against companies that manufacture or compound alcohol-based hand sanitizers if they comply with certain requirements which include drug labeling requirements, establishment registration, and drug listing. In addition, this policy only applies to products that contain certain USP grade ingredients in certain concentrations and which do not contain any other active or inactive ingredients.
This could be the end the story, but there is a significant point which should be considered.
This new program was specifically designed to grab revenue from people who were stepping in at a time of crisis. While the distillers are now getting a pass, they were targeted by the Democrat-controlled House of Representatives and the Republican-controlled Senate who jointly created the bill, and the bill was signed into law by Trump. It was a small provision in legislation which was generally seen as a positive, and it was going to result in layoffs which would have harmed innocent citizens who’d attempted to help their neighbors.
The ramifications of that… that money isn’t simply manufactured from the air, that the government rarely creates any wealth, that the federal government is so immense that it can crush the same people it’s trying to help, that the economy is too complex for it to be run by a handful of central planners, and even that the “little guy” can make a difference and right wrongs with the aid of a dutiful press to amplify their concerns… are basic concepts which millions of Americans used to claim to understand. Those ideas retain their validity, even if they’ve been rejected either because of faith in a parental government or allegiance to an authoritarian.