Nov 17, 2022
Fresenius Medical Care (FMC) is the world's largest dialysis company. It has been the top provider of dialysis in the 50 billion dollar United States market for the past few decades. However, change has been forecast regarding the dialysis market, particularly in the United States. Several factors are influencing the changes, but the one likely to have the most impact is several medications that can slow, or halt the progression of kidney disease. Anticipating a reduction in the number of patients needing dialysis in the future has prompted Fresenius Medical Care to expand to kidney care patients pre-dialysis.
AstraZeneca’s diabetes drug, Farxiga, has been shown to have benefits for non diabetics. It is an approved treatment to slow the progression of chronic kidney disease (CKD). Eli Lilly also makes a diabetes drug called Jardiance and it also is expected to be used like Farxiga to slow the progression of chronic kidney disease (CKD). Diabetes is the leading cause of chronic kidney disease, which can progress to End Stage Renal Disease (ESRD), requiring dialysis treatments or a kidney transplant in order to survive. vThese drugs look to be very promising and good news to both diabetics and non diabetics with chronic kidney disease.
However, Fresenius looked five to ten years in the future and saw the possibility that the number of patients reaching end stage renal disease and therefore needing dialysis could substantially drop off, meaning revenues for the company would decline.
Obesity is also a contributing factor in chronic kidney disease, and there are two new drugs on that front that have promising results. Novo Nordisk’s Wegovy Injection, and Eli Lilly’s Mounjaro are new treatment options for obesity.
Fresenius Medical Care’s “17.6 billion euros in annual revenue has been sustained for decades by high rates of obesity and diabetes, which contribute to kidney damage”. Because these medications may reduce patient population growth at Fresenius Dialysis Centers, they sought to expand beyond the dialysis business into the care of earlier stage kidney disease.
The new medications were not the only pressure Fresenius felt when deciding to expand. The dialysis industry faces rising costs,and a temporary shrinking of its patient pool, especially in the United States. More than 15,000 people on dialysis are estimated to have died of COVID just in the year 2020, according to the U.S. Renal Data System. Also problematic to dialysis providers is a labor shortage in the U.S. healthcare market which is driving up wages and forcing Fresenius Medical Care and other dialysis providers to rely more on temporary staff.
FMC derives about 70% of its revenue from the United States. These pressures on the industry have pushed FMC’s shares to a 13 year low and the company’s net income is expected to decline 14.5%. FMC’s parent company Fresenius SE said a sale of FMC can not be ruled out.
For now Fresenius Medical care is trying to reposition themselves in the market. They see the new drugs as a hopeful benefit for both the patients and the company. By slowing the progression of chronic kidney disease, it should prolong lives and prolonged lives may mean patients reach end stage renal disease, needing dialysis, possibly for longer periods of time. This keeps patients in FMC’s care longer.
"In the short run, we’ll see the impact of some delayed (chronic kidney disease) progression but in the longer run, we’re probably going to see an expansion of the number of people with chronic kidney disease that survive to live with the disease”.
“Patients that start dialysis in better health will not pass away after four or five years, but will be part of a group that remain on therapy for maybe seven or eight years, which are rather rare cases today”.
Deciding to expand into earlier care of patients with chronic kidney disease, FMC purchased Cricket Health last March. Cricket Health is one of several companies in the United States that specialize in managing kidney patient care. FMC said that this new kidney care market is worth $120 billion.
FMC declined to comment on specific estimates about the new pharmaceutical drugs and their impact on FMC’s revenue. However FMC’s Maddux did say, “ The growth rate in dialysis patients is probably not what was anticipated 10 years ago when we didn’t see these drugs. We saw a steeper curve than what we now think it will probably be”.
Monica McCarthy has bachelors in Political Science and Criminal Justice from Central Washington University. A majority of her career was spent as a political consultant. She currently works at KidneyLuv as a staff writer.
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