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We sought to determine the incidence of newly diagnosed diabetes in treated elderly hypertensive patients and the prognostic impact of diabetes on long-term survival.The Second Australian National Blood Pressure (ANBP2) study randomized 6,083 hypertensive patients aged 65–84 years to angiotensin-converting enzyme inhibitor (ACEI) or thiazide diuretic–based therapy and followed them for a median of 4.1 years. Long-term survival was determined in 5,678 patients over an additional median of 6.9 years after ANBP2 (post-trial).After ANBP2, the cohort was classified into preexisting (7.2%), newly diagnosed (5.6%), and no diabetes (87.2%) groups. A 44% higher incidence of newly diagnosed diabetes was observed in patients randomized to thiazide diuretic compared with ACEI-based treatment. The other predictors of newly diagnosed diabetes were having a higher body mass index, having a higher random blood glucose, and living in a regional location compared to major cities (a geographical classification based on accessibility) at study entry. After completion of ANBP2, compared with those with no diabetes, the preexisting diabetes group experienced higher cardiovascular (hazards ratio (HR) = 1.65; 95% confidence interval (CI) = 1.03–2.65) and all-cause mortality (HR = 1.40; 95% CI = 1.02–1.92) when adjusted for age, sex, and treatment. A similar pattern was observed after including the post-trial period for cardiovascular (HR = 1.52; 95% CI = 1.20–1.93) and all-cause mortality (HR = 1.50; 95% CI = 1.29–1.73). However, when the newly diagnosed group was compared with the no diabetes group, no significant difference was observed in cardiovascular (HR = 0.33; 95% CI = 0.11–1.05) or all-cause mortality (HR = 0.76; 95% CI = 0.47–1.23) either during the ANBP2 trial or including post-trial follow-up (cardiovascular: HR = 0.82; 95% CI = 0.58–1.17; all-cause mortality: HR = 1.04; 95% CI = 0.85–1.27).Long-term presence of diabetes reduces survival. Compared with thiazide diuretics, ACEI-based antihypertensives may delay the development of diabetes in those at risk and thus potentially improve cardiovascular outcome in the elderly.