Richmond Mayor Stoney Asks U.S. Health Secretary to Investigate Loopholes in Low-Income Drug Pricing for Hospitals

Richmond Mayor Levar Stoney is calling on U.S. Health and Human Services Secretary Xavier Becerra to investigate low-income drug-pricing practices after The New York Times published a report on practices at Richmond Community Hospital, owned by Bon Secours.

“Bon Secours Mercy Health, a major nonprofit health system, used the poverty of Richmond Community Hospital’s patients to tap into a lucrative federal drug program,” The Times said in a Saturday article.

According to the report, the health system removed most of the services provided at Richmond Community Hospital, located in a low-income city region. However, the “hollowed-out hospital” has higher profit margins than any other Virginia hospital, with up to $100 million in earnings.

Federal drug program 340B allows hospitals in low-income communities to buy drugs at significantly discounted rates. Bon Secours used Richmond Community to buy the drugs, while satellite clinics based out of the hospital but located in suburban areas could then charge higher drug prices to wealthier patients’ insurance policies, The Times reported.

In his Tuesday letter, Stoney asked Becerra to investigate the use of 340B in Richmond and across the country.

“The intended cost-savings and actualized profits from this program were intended to expand healthcare access for low-income and uninsured individuals,” he said. “I also recognize this program is vital to those communities – but for our East End Richmond Community, this does not seem to be the case. Inadvertent loopholes have been utilized, increasing profit margins for the hospital system while they have reduced services in one of our predominantly Black communities.”

“It is immoral to profit off the backs of Black and Brown residents under the guise of ‘healthcare,’ and it must cease immediately,” Stoney wrote.

Bon Secours sent a lengthy statement to The Virginia Star:

“As a faith-based, Mission-driven health care ministry, Bon Secours’ [sic] works to extend the compassionate ministry of Jesus by improving the health and well-being of our communities. This mission is at the center of our organization – and builds on our century-old legacy of caring for all who come through our doors, especially the most vulnerable among us. Today, we continue to build on the legacy of our founding congregation through our commitment to addressing health disparities, the social determinants of health and environmental factors that impact our communities, and disproportionately so, the poor and uninsured. Our nonprofit ministry provides a wide range of services beyond traditional care delivery to support our communities – including but not limited to – mobile health clinics for the uninsured, forensic nursing services, transportation services in the East End, fresh food access, economic equity services and career development assistance – to support the health and well-being of the whole person. 

 “Our team of dedicated, compassionate associates, including clinicians and nurses, have and continue to work tirelessly to increase access to quality care – and to support programs that improve the well-being of communities across the Richmond area. 

“To suggest that we don’t operate in full support of our important Mission is without merit and we take issue with such baseless allegations.”

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Eric Burk is a reporter at The Virginia Star and The Star News Network

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