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Diabetic kidney disease (DKD) is the leading cause of ESRD. We conducted an open-label, prospective, randomized trial to determine whether pentoxifylline (PTF), which reduces albuminuria, in addition to renin-angiotensin system (RAS) blockade, can slow progression of renal disease in patients with type 2 diabetes and stages 3–4 CKD. Participantswere assigned to receive PTF (1200 mg/d) (n=82) or to a control group (n=87) for 2 years. All patients received similar doses of RAS inhibitors. At study end, eGFR had decreased by a mean6SEM of 2.160.4 ml/min per 1.73 m2 in the PTF group compared with 6.560.4 ml/min per 1.73 m2 in the control group, with a between-group difference of 4.3 ml/min per 1.73 m2 (95% confidence interval [95% CI], 3.1 to 5.5 ml/min per 1.73 m2; P,0.001) in favor of PTF. The proportion of patients with a rate of eGFR decline greater than the median rate of decline (0.16 ml/min per 1.73 m2 per month) was lower in the PTF group than in the control group (33.3% versus 68.2%; P,0.001). Percentage change in urinary albumin excretion was 5.7% (95% CI, 20.3% to 11.1%) in the control group and 214.9% (95% CI, 220.4% to 29.4%) in the PTF group (P=0.001). Urine TNF-a decreased from a median 16 ng/g (interquartile range, 11–20.1 ng/g) to 14.3 ng/g (interquartile range, 9.2–18.4 ng/g) in the PTF group (P,0.01), with no changes in the control group. In this population, addition of PTF to RAS inhibitors resulted in a smaller decrease in eGFR and a greater reduction of residual albuminuria.