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J Intern Med. 1997 May;241(5):415-20.

Do drug costs affect physicians' prescription decisions?

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Medical Technology Division-Health Insurance Institution (Kupat Holim Klalit, Tel Aviv, Israel.



To study the impact of the cost of pharmaceuticals on physicians' decisions about drug prescription.


A simulation protocol for the treatment of two patients, one with mild and the other with a severe form of urinary tract infection (UTI), was designed. Thirty family physicians in outpatient clinics and 30 physicians in the internal medicine wards of a Community Hospital participated in the project. They had to prescribe treatment for the patients twice: at phase I, when the drug cost was unknown, and at phase II, after 2 months, when the price of the drugs was brought to their attention. The physicians selected the medication from a list of drugs commonly used for the treatment of UTIs.


Analysis of the findings indicates that an awareness of drug costs affects prescription decisions among physicians in hospital wards, whereas family physicians showed a preference for less expensive drugs even before they were informed about drug costs. An extrapolation of the results shows that knowledge about the cost of the drugs usually administered for treatment of UTI, could save at least IS 112,883 ($34,207) a month to Kupat Holim Klalit (KHK) the health insurance institution to which the outpatient clinics and the hospital belong.


When economic aspects of healthcare are considered, information on drug costs may be an important factor in physicians' decision-making processes and for saving pharmaceutical expenses.

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