The Impact of Information Technology on the Diffusion of New Pharmaceuticals

Kenneth Arrow, Kamran Bilir and Alan T. Sorensen

No 23257, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do information differences across U.S. physicians contribute to treatment disparities? This paper uses a unique new dataset to evaluate how changes in physician access to a decision-relevant drug database affect prescribing decisions. Our results indicate that doctors using the reference have a significantly greater propensity to prescribe generic drugs, are faster to begin prescribing new generics, and prescribe a more diverse set of products. Notably, physicians using the reference database are not faster to prescribe new branded drugs. Given that a new generic drug resembles its branded equivalent clinically, these results are consistent with database users responding primarily to the increased accessibility of non-clinical information such as drug price and insurance formulary data; the results also suggest improvements to physician information access have important aggregate implications for the costs and efficiency of medical care. We address possible selection effects in physician types by relying on within-doctor variation and an instrument for adoption timing that is based on the marketing strategy of the drug reference firm.

JEL-codes: I10 O33 (search for similar items in EconPapers)
Date: 2017-03
New Economics Papers: this item is included in nep-hea, nep-ino and nep-pay
Note: EH IO
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Citations: View citations in EconPapers (4)

Published as Kenneth J. Arrow & L. Kamran Bilir & Alan Sorensen, 2020. "The Impact of Information Technology on the Diffusion of New Pharmaceuticals," American Economic Journal: Applied Economics, vol 12(3), pages 1-39.

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Journal Article: The Impact of Information Technology on the Diffusion of New Pharmaceuticals (2020)
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