OBJECTIVES: The three most important biological agents adalimumab, etanercept and infliximab caused  €940mn drug expenditure at a 23% annual growth rate for the German Statutory Health Insurance funds in 2009. The objective of this analysis is to test the suitability of IQWiG’s efficiency frontier (EF) method for pharmacoeconomic analysis of biological agents in the treatment of early rheumatoid arthritis. METHODS: We apply simplified versions of the EF to infliximab. Effectiveness analysis is based on the two year findings of the BeSt trial. It was identified as the only trial to compare an active infliximab strategy to active conventional strategies including multiple disease-modifying anti-rheumatic drugs (DMARDS). In the first scenario, the analysis is conducted for the complete patient base. In the second scenario, the evaluation is limited to patients, who are resistant to conventional DMARD therapy. RESULTS: For the first scenario, effectiveness was measured in terms of patient response defined as a sustained DAS44 score ≤2.4 after two years. The EF was constructed with the best conventional alternatives, methotrexate monotherapy and initial combination therapy with methotrexate, sulfasalazine and prednisone. They achieved 33% and 58% response at €230 and €790 cumulative expenditure. Infliximab was superior in patient response with 72% but caused 3€0,640 cumulative drug costs. IQWiG’s approach yields inefficiency of infliximab since it is located to the right of the EF. In the second scenario, infliximab is not comparable to conventional DMARDs with the EF approach. CONCLUSIONS: Our analysis calls for cautious application of the EF method. Depending on the setup, the EF may fail to recognize the value of highly innovative but expensive drugs for a specific patient subgroup. In the case of missing conventional alternatives, the EF yields no global measure of efficiency for comparisons across indications. Therefore, complementary methods like IQWiG’s budget impact analysis are required.