The impact of information technology on the diffusion of new pharmaceuticals

Do information differences across US 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 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. These results are consistent with database users responding primarily to the increased accessibility of non-clinical information such as pricing and insurance formulary data, and suggest improvements to physician information access have important implications for aggregate healthcare costs.