What Distilleries Should Know if They Are Thinking About Making Hand Sanitizer During the COVID-19 Pandemic
March 31, 2020
By: Jennifer L. Tsyn
Due to recent shortages in hand sanitizer, some distilleries have turned to the production of hand sanitizer. This emergency production will assist in responding to a public health crisis.
Distilleries should, however, ensure that they are following the guidance provided by the Federal Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (TTB), as well as the World Health Organization (WHO) to ensure that the product is not toxic to users, and that it is appropriately effective against viruses.
Following this issued guidance will help protect distilleries against potential penalties from governmental entities, as well as potential claims from the users of the products.
Guidance for the Emergency Production of Hand Sanitizer
The FDA recently issued guidance about the emergency production of hand sanitizer, which states:
“Because of the public health emergency posed by COVID-19, FDA does not intend to take action against compounders that prepare alcohol-based hand sanitizers for consumer use and for use as health care personnel hand rubs for the duration of the public health emergency declared by the Secretary of HHS on January 31, 2020, provided the following circumstances are present…”
- The hand sanitizer is compounded using only the following United States Pharmacopoeia (USP) grade ingredients in the preparation of the product (percentage in final product formulation) consistent with World Health Organization (WHO) recommendations:
a. Alcohol (ethanol) (80%, volume/volume (v/v)) in an aqueous solution denatured according to Alcohol and Tobacco Tax and Trade Bureau regulations in 27 CFR part 20; or Isopropyl Alcohol (75%, v/v) in an aqueous solution
b. Glycerol (1.45% v/v)
c. Hydrogen peroxide (0.125% v/v)
d. Sterile distilled water or boiled cold water
Any distillery making hand sanitizer should also be aware of the following recommendations:
- do not add other active or inactive ingredients; different or additional ingredients may impact the quality and potency of the product;
- pay particular attention to ensure the ethanol or isopropyl alcohol active ingredient is correct and the correct amount of the active ingredient is used;
- the hand sanitizer should be prepared under conditions routinely used by the distillery; and
- the hand sanitizer must be labeled consistent with the appropriate, required labeling.
Distilleries Need to Register With FDA, But Do Not Need to Wait for Approval
The FDA does require any distillery making the hand sanitizer to register with the FDA. It is important to note that once the online registration has been made, the distillery does not need to wait for any further communication from the FDA before starting to manufacture and distribute the hand sanitizer.
The alcohol used in making hand sanitizer should be denatured “either by the alcohol producer or at the point of production of the finished hand sanitizer product.” Regarding the denaturing requirements, the FDA guidance further explains that “alcohol should be used in a final product concentration between 60-95% (v/v) in an aqueous solution denatured according to Alcohol and Tobacco Tax and Trade Bureau regulations in 27 CFR part 20; isopropyl alcohol should be used in a concentration between 70-91.3% (v/v). This guidance is consistent with WHO’s recommended formulation specifications of 80% alcohol and 75% isopropyl alcohol.”
Use of CDA
If a distillery wishes to use completely denatured alcohol (CDA) in the production of the hand sanitizer, additional caution should be used. To the extent that the CDA can conform to both the FDA/WHO standards, and is denatured in a manner consistent with 27 CFR Part 20, it may be acceptable to use CDA for hand sanitizer. Distilleries should keep in mind also the general restrictions, under 27 CFR 20.141, which state:
(a) Each formulation of completely denatured alcohol may be sold and used for any purpose, subject to the limitations in the formula prescribed in part 21 of this chapter…
(b) Completely denatured alcohol may not be used in the manufacture of preparations or products for internal human use or consumption where any of the alcohol or the denaturants used in that alcohol remain in the finished product.
TTB Waiving Certain Formula Approvals
The TTB also issued public guidance entitled “Production of Hand Sanitizer to Address the COVID-19 Pandemic” on March 18, 2020, which was then updated on March 26, 2020. That guidance stated: “Tax-free ethanol may be used to produce hand sanitizer if it is denatured according to TTB regulations and Food and Drug Administration (FDA) guidance.”
TTB is temporarily waiving certain formula approvals for the manufacture of hand sanitizer and is waiving and expediting certain permit requirements. Specifically, the TTB has exempted permittees from obtaining formula approval from TTB before producing hand sanitizer if the manufacturer is using a formula consistent with WHO guidance. Ethanol is one of the approved reagents in the WHO guidance.
The TTB guidance makes it clear that any existing DSP (Distilled Spirits Plant) therefore can immediately commence production of hand sanitizer or distilled spirits (ethanol) for use in hand sanitizer without having to first obtain authorization from the TTB. Any existing DSP also may remove undenatured or denatured ethanol from bonded premises free of tax for use by any state or local government to produce hand sanitizer.
In addition, any existing DSP may remove undenatured or denatured ethanol from bonded premises free of tax for use by hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics and qualifying educational institutions seeking to use it to manufacture hand sanitizer, and not for resale or use in the manufacture of any product for sale. See 26 U.S.C. 5214(a)(3). The guidance also stated that “Alcohol, whether or not denatured, may be delivered tax-free to state and local governments for non-beverage purposes. The same is true for hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics and qualifying educational institutions, if not for resale or use in the manufacture of any product for sale.”
Production of hand sanitizer in response to the COVID-19 crisis is a worthy endeavor, but distilleries should be careful to follow all published guidance to protect themselves, and the public. Distilleries should also consider contacting legal counsel to add appropriate language regarding the hand sanitizer to their standard terms and conditions or purchase orders, or to draft a release for recipients to sign.
Jennifer Tsyn represents businesses and individuals in a variety of business law matters, with a focus on liquor licensing issues. If you have any questions about this information memo, please contact Jennifer at jtsyn@bsk.com or (518) 533-3218.
