Working Paper: NBER ID: w23257
Authors: Kenneth J. Arrow; Kamran Bilir; Alan T. Sorensen
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.
Keywords: Information Technology; Diffusion of Pharmaceuticals; Health Care Disparities; Prescribing Behavior
JEL Codes: I10; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Access to the drug reference database (L65) | Prescribing behavior among physicians (I11) |
| Access to the drug reference database (L65) | Likelihood of prescribing new generics (L65) |
| Access to the drug reference database (L65) | Likelihood of prescribing older generics (L65) |
| Access to the drug reference database (L65) | Likelihood of prescribing new branded drugs (L65) |
| Access to the drug reference database (L65) | Diversity of prescribed drugs (L65) |
| Access to the drug reference database (L65) | Herfindahl-Hirschman Index (HHI) (L19) |