Do you drop a client who makes you work too hard and refuses to follow the terms of the contract?

We clean linens. Mainly towels and sheets.Blood stain, no problem, bag it in a biohazard bag. We'll even get it out. Anything with bodily fluids needs to be bagged in the appropriate plastic bag. Otherwise the whole cart is contaminated. The cart itself is contaminated. We have a client who refuses to properly bag biohazards. Likewise, it is expected that sharps are not present in the linens. We don't want anyone getting pricked with a needle with such nasties as HIV or HBV. This client has had sharps in their linens. More than all other accounts combined. This is unacceptable. Finally, when solids are present i.e. feces, the customer has to make a reasonable effort to remove the solids. They never do. There is a way to fold dirty contaminated linens so we know it has been checked. They just bunch it up in nylon mesh bags and toss it in the cart. We've spoken to several people, at least twice each. Letters have been sent Certified, Return Receipt to even the owner. Everyone says it will be taken care of. It never is. It is about 10% of my total sales, about $600 per week. They are my lowest profit, perhaps 30%. Most run around 40-45%. In actual numbers, they mean about $200 a week to my pocket. They are a pain. They are also creating a certain amount of danger. Would you drop them? I fear they will smear my name on the web out of spite. I was thinking of giving them a huge price increase, maybe 50% to give them the hint.