Justin Lake: And then, Doc, can you tell us why that number is so low, again, among people that are kind of marching towards kidney failure. Why is the take up rate only 18% to 30%? Could you — do not think that goes higher given the some of these studies that are coming out that are highlighting the benefits? Or are those benefits always been known and the magnitude of those benefits always been known. And there are reasons why it’s still so low.
Jeffrey Giullian: Yes. It takes a lot of speculation to understand why patients do or don’t do what they ultimately choose. Some of this has to do with access to physicians and access to medications and social determinants of health. Some of it has to do with discontinuation rates for any number of reasons, such as side effects and things along those lines. And quite frankly, our clinical research team has done research in the population of patients that ultimately progresses from CKD to end-stage renal disease. And there’s just a number of social and other reasons, including behavioral health, education, et cetera, that limits the full uptake like we might expect on paper.
Justin Lake: Got it. Appreciate it. And then just two quick numbers questions, I’ll jump out. The first, can you tell us your run rate, in terms of patient care costs that are now coming from drugs? Just trying to understand the totality of where drug spending is at the moment? And then secondly, Joel, if we look back, it’s exciting to hear you’re kind of going to get back to buying back the stock. I think the last time you were buying it in 2022, I think you averaged around $200 million a quarter. Could investors think about that as a reasonable kind of jumping point, in terms of what — how to think about you kind of pace of buybacks? Thanks.
Joel Ackerman: Yes. Let me take the buyback one first. In terms of pace, it is hard to put a number out there, I’d say, look, we’ve always been comfortable using excess cash flow as well as available leverage to buy back. What I would point out is, we have a bigger revolver than we’ve had historically. We used to have a $1 billion revolver. We upsized that to $1.5 billion. So if you think about the limitation of liquidity on our share buybacks, we would probably be more comfortable tapping into the revolver for buybacks now, now that we’ve got a bigger revolver than we did before.
Justin Lake: And the second part of the question was what percentage or what’s the cost of treatment on drugs?
Joel Ackerman: Yes. I assume what you’re really interested is in anemia there, that’s been the source of the biggest savings. That number has come down dramatically to a point, where I think it’s hard to bake in a lot of major savings from that going forward.
Justin Lake: That’s helpful. Thanks, guys.
Joel Ackerman: Thank you, Justin.
Operator: Our next question comes from Kevin Fischbeck with Bank of America. Your line is open.
Kevin Fischbeck: Great. Thanks. Maybe just to circle back to buyback comment. Is it safe to say that the $3 million to $3.5 million is still the gating factor then to that? Or now that you feel more comfortable about your base EBITDA, the ability to grow that you’d be okay over some period of time going above the $3.5 million that you would get back to that $3 million to $3.5 million?
Joel Ackerman: Yes, Kevin, I wouldn’t view it as a gating factor, but rather we committed to getting back to that place. And now we are there, and we feel comfortable being there. And we will revert back and forth as we see appropriate. Right now, we see a disconnect between how we are feeling about our business and how the market is interpreting our results. And so we might be very aggressive. And so that is, of course, term of art because if I use that and I buy $300 million, you’re going to think it was $400 million. And so I would say, from my perspective, the right way to think about it is, we want to give our money back to our shareholders, and we want to be capital efficient, and we want to pounce if there’s an opportunity or a window, and that’s probably the best way to think about it.
Kevin Fischbeck: Okay. That’s helpful. And then, I guess, one of the things as you walk through your model about — you talked about the slowdown in progression of the disease. You kind of started with like an advanced CKD population. Is there any potential that taking the drug earlier would start that clock earlier than that and extend the 25% slowdown? Or is this really something that really does just kind of kick in, they’re all going to happen later on in that 10-year window is when the clock starts. And I think at the beginning, you talked about how you all see a volume impact for, whatever it was, 15 years or so. But then you start talking about how the drug has been used in the last 7 years. So trying to figure out when does the clock start on that volume impact?
Jeffrey Giullian: Sure. Thanks, Kevin. This is Jeff Giullian again. A couple of things. Number one, for chronic kidney disease in general, the time frame can be variable, but from moving from early CKD Stage 3, all the way to end-stage kidney disease, is often 15 to 20 years. I think the average is about 18 years. Even for people living with diabetes, that time frame is 11, 12 years or even longer in some cases.
Kevin Fischbeck: Sorry, let me correct you said 3. You meant to say pre from …
Jeffrey Giullian: Yes, exactly. Thank you. And so as we look at this and have modeled it out and have thought about it, we don’t believe that we are going to see a major impact in the next 10 years. Then to take that one step further, as we’ve looked at the clinical studies, even the subset of clinical studies that have demonstrated any kidney impact at all, that impact is significantly lower in the patient population that is pre-CKD Stage 3.
Joel Ackerman: Kevin, it’s Joel here. Let me add one more point because we are probably not talking enough about the potential offset from a reduction in cardiac mortality. And that plays into this question of what impact are we seeing and when are we seeing it? And I think one of the reasons we are seeing — we think we are seeing so little impact now is because the uptake in the drug has been so low. Jeff, correct me if I’m wrong, but GLP-1 uptake in CKD is low single digits today, right? So you wouldn’t expect to see it at such a low uptake. The other important thing is both for GLP-1s and for SGLT2 inhibitors, there has been clear demonstration of a reduction in cardiac mortality. And the way we think about that playing through our population, is so many more CKD patients are likely to die of cardiac disease, than ultimately progress to ESKD.
So if you can reduce that number, who are passing away from cardiac disease, it creates a larger population that could potentially, ultimately be incident on ESRD, and that would offset some of the impact of incident delay. And so if we are seeing the negative impact of SGLT2 inhibitors or GLP-1s today, even though the uptake of those drugs is so small, there is a good chance that we are also seeing the mitigating effect on the cardiac death.
