E-Prescribing Systems Can Improve Drug Cost Savings

Ruzanna Harutyunyan's picture

Researchers at Brigham and Women’s Hospital and Massachusetts General Hospital found that electronic prescribing systems that allow doctors to select lower cost or generic medications can save $845,000 per 100,000 patients per year, and possibly more.

With insurers, policymakers and patients seeking ways to control fast-rising drug costs, researchers wanted to test the cost-savings potential of an electronic prescribing system that includes data on insurers’ formularies. Formularies are the lists of approved prescription drugs and corresponding patient co-payments for each insurance plan.

Using formularies, patients are charged the lowest cost and co-payment for generic medications (tier 1), a higher sum for preferred brand-name drugs (tier 2) and the highest amount for non-preferred brand-name drugs (tier 3). However, a major challenge to the effectiveness of tiered systems is the lack of current data on insurers’ prescription drug formularies at the moment of prescribing.


This new research demonstrates that “an electronic prescribing system showing doctors up-to-date formulary information can provide the opportunity to select more cost-effective medications,” according to Michael A. Fischer, MD, of the Department of Medicine at BWH. “This change in the way medication is prescribed can save money for insurers and patients alike.”

To test the cost-savings potential of an electronic prescribing system that includes data on insurers’ formularies, researchers compared the change in prescriptions written in three formulary tiers before and after an electronic prescribing system with formulary decision support was launched. The study examined data collected over 18 months from two major Massachusetts health insurers covering 1.5 million patients.

Doctors using electronic prescribing with formulary decision support, which accounted for over 200,000 filled prescriptions in the study, increased their use of tier 1 prescriptions by 3.3 percent, study authors found. Prescriptions written for tier 2 and tier 3 drugs decreased by 1.9 percent and 1.5 percent, respectively. These changes were above and beyond increasing use of generics that is occurring among all doctors and the already high rate of generic drug use in Massachusetts.

Dr. Fischer noted that even doctors who had access to e-prescribing only used it about 20 percent of the time: “Our results likely represent a conservative estimate of the potential savings – as doctors begin to e-prescribe more frequently, the amount saved could increase dramatically.”


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