My home office window overlooks a cul-de-sac. Several times over the past eight years, small streams of water have appeared in the street overnight. The water runs from the middle area of the cul-de-sac to the storm drain at one end. I have come to learn that this means the water feed line to my house has sprung a leak. I call the city public works office and they send out a truck to confirm that the pipe is indeed leaking. The next morning, a city water department repair crew appears with a backhoe, dump truck, and two pickup trucks of laborers. About 8 am, they park the equipment on the cul-de-sac and then go on break until around 9:30. They return and jackhammer the asphalt, use the backhoe to dig a 15� by 5� trench, and locate the leak. Then they go to lunch for an hour and a half. They return again and fix the pipe, fill in the hole, and repave the street. At 3:30 they are gone. It's an interesting routine to watch and it always leaves me wondering what they do for the three hours they are gone.

Last October, I received a notice from city hall stating that the water department would no longer fix leaks on private property for free. The building owner would be charged the going rate for such repairs.

One day in November, I noticed another leak in the cul-de-sac. I called the city. The routine began again. As I watched the crew work, I wondered if I would be charged for these repairs, as my house was the only one using this feed line.

I walked out to talk to the crew. I asked how it was going.

�Swimmingly�, one guy answered.

�They�re not going to charge me for this, are they?� I asked. �It�s not on my property.�

�I don�t know�, another answered. �This is the eighth time this line has been fixed.�

I looked into the trench. I could make out a piece of the pipe. I was surprised to see that it was only half-inch pipe. Everything was brown and muddy, so it took me a while to discern the entire 15-foot section that had been exposed. I then noticed that this 15-foot section was comprised of several, short, alternating sections of copper pipe and plastic pipe. It became obvious to me that each time there was a leak in the plastic pipe, they repaired it by splicing in about an 18-inch segment of copper pipe. I could see about five alternating copper-to-plastic-to-copper segments in the trench.

�Why don�t you just replace all of the exposed plastic pipe now?� I asked.

A man working in the trench looked up, smiled, and said, �Job security.�

�We�re only authorized to fix the leak�, the crew chief quickly blurted out.

I knew this conversation would be fruitless. I walked away shaking my head and planning my rant for the water registrar�s office if a bill arrived. (It never did.)

Obviously, it would have been in the best interests of the city, the taxpayers, and me as the property owner if the entire pipe had been replaced. It would have cost just a few dollars more to fix it right and avoid having to dig it up again. Unfortunately, non-empowered employees and strict union laws ensure that this �job security� way of doing things continues. Using a commonsense approach to fixing this pipe would have required significant changes in the city�s workforce culture and probably, the union contracts.

I�ve been thinking a lot lately about the my favorite drug companies, kidney disease, and possible cures. Yesterday, when I saw one of the city�s maintenance trucks out my window after reading about Gambro's entrance into regenerative medicine, it suddenly dawned on me that there are many amusing parallels shared by these two situations.

Dialysis providers and drug companies in the end-stage renal disease marketplace make money by treating diseases, not curing them. If they cured diseases, they would find themselves out of a job. Medicare spending for IV ESRD drugs has exploded. For job security, these companies need to have kidney patients use their drugs for a long time. For growth, they must create new drugs to treat one or more of the other disease processes associated with renal failure.

In reality, the federal government and our current Medicare ESRD reimbursement system does nothing to encourage private companies to take the initiative and research possible cures for kidney diseases. Medicare continues to provide reimbursement for the most widely used IV drug, EPO, at several times its manufacturing cost. Amgen, its manufacturer, obviously benefits most when the largest possible doses of its drug are given to patients. As a well-run business should, their clinical researchers, congressional lobbyists, and patent lawyers all work to maintain and optimize this system. The enormous profits that result from these actions have allowed Amgen to build an often extravagant and opulent corporate culture.

So, how can we change this and eliminate end-stage renal disease? Please think about this�..

We should start a $15 billion, budget-neutral, space-race-like, winner-takes-most competition that uses our economic system�s best weapons --- entrepreneurship, private financing, and the competitive marketplace.

Our goal is to create a technology that allows people to grow new kidneys. First, the U.S. government announces a competition. The winner gets a big, huge, monetary prize. To encourage competition and a variety of approaches, up to 10 companies and/or institutions are allowed to begin competing for the prize. After a successful application screening, each competing group gets $100 million for its first year's work. Every year, some groups would probably drop out because they had taken the wrong paths and approaches. If none of them dropped out, then the one or two programs showing the least promise would be eliminated each year. The remaining groups in the competition would continue to get yearly grants of $100 million or more. These groups could seek out additional private financing at any time. If eliminated from the official competition, that group could merge into one of the survivors or seek its own private financing. As the work progressed, the surviving groups could also combine efforts or make deals to collaborate. The eventual winner gets a $5 billion grand prize. (Over the years, financing all these groups and administering the competition would cost an additional $5-10 billion.) Another beauty of this process is that it would force these groups to operate as economically, efficiently, and fast as possible.

Just like the 1960's space exploration program, I'm sure that there will be numerous collateral discoveries and products coming out of their work that will benefit other branches of medicine, science, and society in general.

We can fund this competition by taking a commonsense approach to ESRD IV drug reimbursement. The drug companies should make profits that are very healthy, but not obscene. The total costs of this competition can be made budget-neutral for the federal government over its lifespan and it will, of course, end up saving hundreds of billions of taxpayer dollars in the coming decades. We need to take CMS's latest 10-year budget projections for ESRD drug costs, subtract $15 billion, and then decide how to spread this "pain" fairly among the drug companies. Put another way, Congress should lower the Medicare ESRD drug reimbursements to more reasonable amounts, have these payments go directly to the drug companies, and then use the savings to fund this competition.

As I look at the web sites of the nephrology-related professional associations and the leading kidney patient organization, I see that the IV drug companies are prominently listed as their biggest sponsors and benefactors. I don't know if these groups can advocate for such a project, considering the huge loss of money they would likely experience. Instead, there would probably have to be a grass-roots call for this kind of solution to end-stage renal disease.

What do we call it?

Racing for Kidneys... The Great Kidney Race...�The Renal Rumble?

In treating end-stage renal disease, I'd just like the federal government to stop thinking and acting like my water department's repair crew.

I would appreciate your ideas, thoughts, and comments at renalweb@renalweb.com.

Gary Peterson

Gary,
I can agree with you that some drug companies are taking unjustly large profits. But isn't that what our capitalistic society tells us to do. To keep a companies stock increasing the company performance must show greater profit each quarter. In today�s capitalistic society if a company does not show a continual increase in profits the companies stock is rapidly dropped. If Amgen were to show a negative quarter their stock would drop like a rock. Some of their tactics to raise profits should be questioned. Dialysis units that were struggling finally got a increase in the DRG and a big drug company wiped it out by raising prices. There are other ways to increase profit such as controlling spending. The lavishness of some drug companies at meetings is sometimes disgusting. They have a near monopoly but still go full throttle on marketing. How much do they spend painting busses and putting up billboards? May be the problem goes all the way to how our capatilstic society functions not just the drug companies obseen profits.

On the other hand they do support a lot of research. Even if much of it is to show that there products have a place in the market. Much of their training literature is well worth having. And some of it even covers more that just anemia. This makes it a tough call as to weather they are benefiting the dialysis industry or rapping it.

IMHO if they were not flaunting their profits to build there stock attacks on the company would not be necessary. But then the stock would not grow and the company could not develop new drugs.

Gambro�s shift to regenerative medicine I also found interesting. Other companies have also tried to follow what the big drug companies have done. �B� seems to be moving in that direction also. I wouldn�t be surprised to see �B� sell off its dialysis and PD division to move deeper into the drug market.

Seems the dialysis business has two high profit centers: drugs and patients.