RICHMOND, Va. (WRIC) — A new U.S. Senate committee report indicates that the not-for-profit organization, Bon Secours, made more than $276 million from a neglected Richmond hospital using a federal prescription drug discount program.
Committee chair Sen. Bill Cassidy (R-La.) announced the release of the new report on Thursday, April 24, calling for Congressional action to reform the 340B Drug Discount Pricing Program — a program that allows hospitals in low-income areas to buy medication at lower prices.
“This investigation underscores that there are transparency and oversight concerns that prevent 340B discounts from translating to better access or lower costs for patients,” Cassidy said. “Congress needs to act to bring much-needed reform to the 340B Program. I look forward to continuing my efforts to bring transparency and improvements to the 340B Program.”
In 2022, Bon Secours was accused of keeping revenue and savings from the 340B Program at Richmond Community Hospital instead of reinvesting them into the hospital and its patients.
In September of that year, following an investigation from The New York Times, 8News spoke with Ralph Hodge, a pastor at Second Baptist Church and community leader. He questioned the lack of progress Richmond Community Hospital had made over the years.
“You look at Saint Francis in Chesterfield and Memorial Regional in Hanover and look at their facilities — and then you look at Richmond Community,” Hodge said. “It’s African Americans who are once again getting the short end of the stick, while other communities are receiving the benefits.”
Hodge was joined by other Richmond officials and state leaders in calling for action at that time. In 2023, a bill in the Virginia General Assembly pushed to increase 340B reporting transparency but was ultimately rejected by a Republican-led subcommittee. Later that same year, an investigation was launched by the U.S. Senate Committee on Health, Education, Labor and Pensions.
In the committee’s report released this week, communication between Cassidy and Bon Secours shows that the organization made more than $276 million in savings and revenue from Richmond Community Hospital between September 2018 and September 2023. When asked if the organization tracks its use of 340B savings generated from wholly-owned contract pharmacies, Bon Secours said it did not.
“The 340B Program has grown considerably since its creation, reaching a record high of $66.3 billion in drug purchases in 2023,” the committee’s Thursday press release reads. “However, there are concerns about whether the 340B Program truly benefits low-income and uninsured patients, with some studies suggesting that the 340B benefit does not translate into increased care or lower costs for vulnerable populations.”
The committee’s report concludes with the proposal of several reforms from Congress to improve the 340B Program’s efficacy:
- Require detailed annual revenue reporting from entities under the program
- Address logistical challenges caused by administrative complexity
- Investigate the financial benefits to third-party administrators — such as the Craneware Group and Macro Helix — to ensure increasing fees don’t disadvantage low-income hospitals and patients
- Require transparency and data reporting for third-party administrators and contract pharmacies
- Provide clear guidelines to ensure that manufacturer discounts benefit 340B-eligible patients — including possible legislative changes to the definition of eligible patient and contract pharmacies’ use of the inventory replenishment model
8News reached out to a Bon Secours spokesperson, who said the organization remains committed to transparency and accountability related to savings achieved through the 340B Program.
“We appreciate the collaboration we’ve had with Senator Cassidy’s office over the past year, and we realize the importance of questions raised about how discounted prices from drug manufacturers allow us to provide care in the communities we serve,” the spokesperson said, in part. “We stand behind the high-quality health care provided by Richmond Community Hospital to the residents of the City of Richmond, and we are grateful for the important investments in the East End community made possible through participation in the 340B Program.”
The full report can be read here.
