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Electronic drug referencing systems allow doctors to quickly browse an ever-increasing list of medicines and more easily identify medicines covered under a patient’s insurance. A recent paper by economists Kenneth Arrow, Kamran Bilir, and Alan Sorensen analyzes how the prescription behavior of doctors changes after they adopt this technology.
The three economists analyzed the prescription behavior of over 125,000 doctors from 2000 to 2010 by tracking when each doctor started using an electronic system. Their results show that when doctors have better access to information, patient welfare increases. Through the system, doctors see when generic versions of brand-name drugs are released and covered under patients’ insurance. As a result, they prescribe newly released generics up to two months sooner than when they did not have such a system in place. This lowers the cost of medicines for patients.