The Effects of Supplier-Induced Demand in the Use of ANTI-VEGF Drugs for the Treatment of Age-Related Macular Degeneration

Abstract

The theory of Supplier-Induced Demand predicts that increases in physician-density will decrease the patient pool of individual physician, leading to decreased income. As a response, physicians are expected to induce extra demand for expensive goods to make up for lost income. In this study, I test for the presence of Supplier Induced Demand in the market for anti-VEGF drugs used for the treatment of Age Related Macular Degeneration (AMD). AMD is the leading cause of blindness in the United States and anti-VEGF drugs are the largest annual expenditure for Medicare Part B reimbursement. This presents a very relevant and important market for testing the theory of Supplier Induced Demand. The study is made possible due to the newly released data on individual physician reimbursements for Medicare Part B services. Information of this nature has not been released to the public in the past. This novel data should allow me to provide new insight in the field of healthcare economics.