OBJECTIVES: The study objective was to quantify disparities in treatment choice of disease modifying anti-rheumatoid drugs (DMARD) used in Rheumatoid Arthritis. METHODS: Retrospective cohorts were constructed from California Medicaid paid insurance claims between January 1, 1998 to December 31, 2005. Non-overlapping monthly episodes were created from pharmacy claims for biologic (adalimumab and etanercept) and standard (methotrexate, lefluonomide, hydroxychloroquine and sulfasalazine) DMARDs. Final sample included 59,788 observations on 7,025 patients. Relative risk ratios (RRR) of factors associated with DMARD treatment choice were assessed by a multinomial logit model with baseline as methotrexate treatment. Covariates included age, gender, race, location of beneficiary’s county in either Northern or Southern California, population density in beneficiaries county, exclusive fee-for-service reimbursement used in beneficiary’s county, Medicare and Medicaid dual eligibility, Elixhauser comorbidities index excluding Rheumatoid arthritis, and expenditures associated with pharmacy, out-patient, inpatient, inpatient-MD, LTC, and ER visits in the three months prior to treatment. Hypothesis testing was based on cluster robust standard errors to control intra-individual correlations. RESULTS: The mean age was 58.6 (±14.5) years with a majority of females (84.0%) and Caucasians (37.6%). All the covariates were unbalanced between the six treatment groups. Statistically significant association was observed between choice of DMARD treatment and all the covariates. Females were less likely to use sulfasalazine (RRR = 0.64, p <0.001), but more likely to use hydroxychloroquine (RRR = 1.45, p = 0.001). The elderly patients were less likely to receive biologics as compared to methotrexate. Patients residing in high population density locations were more likely to receive biologic DMARDs. Hispanics were the only race more likely to receive adalimumab (RRR = 1.92, p = 0.001), as compared to Caucasians. CONCLUSIONS: Results signify marked evidence of socio-demographic disparity in DMARD treatment for RA, and also highlights the variation in DMARD utilization based on geography, and type of reimbursement.