Aims Older and disabled rheumatoid arthritis (RA) patients are often not present in large numbers in clinical trials or registries. A novel, claims-based clinical effectiveness algorithm provides the potential to compare the effectiveness of different biologics among this population using large administrative databases. Method Using Medicare 2006-2010 data for 100% of patients with RA, we identified biologic naïve users of abatacept, adalimumab, etanercept and infliximab, defined as no biologic use during the 12 months before the biologic initiation. The effectiveness was evaluated at 365 days after biologic initiation, determined using a validated claims-based algorithm. We compared the proportion meeting effectiveness criteria for each biologic using robust Poisson regression to compute risk ratios (RRs) adjusted for potential confounders. One year cost per effectively treated patient was calculated by different biologics. Results The study included biologic naïve users of abatacept (n = 2129), adalimumab (n = 2944), etanercept (n = 3517) and infliximab (n = 5654). The algorithm classified the medications as 26% effective for abatacept, 24% for adalimumab, 28% for etanercept and 23% for infliximab, indicating comparable effectiveness. However, after adjustment and compared with infliximab, the RRs for effectiveness were 1.17 (95% CI 1.06, 1.30) for abatacept, 1.11 (95% CI 1.02, 1.23) for adalimumab and 1.27 (95% CI 1.17, 1.39) for etanercept. Older patients had a higher effectiveness than patients who were disabled (RR = 1.18, 95% CI 1.08, 1.28). Infliximab had highest cost per effectively treated patient. Conclusion Abatacept, adalimumab and etanercept are more effective than infliximab among RA patients initiating biologics. Effectiveness was significantly higher among older patients compared with disabled RA Medicare patients.