OBJECTIVES: Biologics represent major advances in the treatment of rheumatoid arthritis (RA) with eight agents available on the market by 2010.  In the Medicare program, 3 agents are Part B covered infusibles, while the remaining five are Part D covered self-injectables.  This study examines the association between cost sharing and the initiation and choice of RA biologic (Part D vs. Part B) in Medicare beneficiaries.  METHODS: Fee-for-service beneficiaries with continuous Part D coverage and RA (ICD-9-CM 714.xx) in the 2010 Medicare 5% files (N=12,923) were examined. Dependent variables included initiation of any biologic among all RA patients and the use of a Part D (vs. Part B) biologic among biologic users.  To isolate the effect of the specialty tier cost-sharing (from that of the donut hole) we further identified whether a Part D biologic was first initiated in the initial coverage limit (ICL) phase or not. The key independent variable was the beneficiary’s low income subsidy (LIS) status i.e. non-LIS vs. full-LIS as a proxy for higher (initially 25% to 35% coinsurance followed by donut hole) vs. lower cost-sharing ($3-$5 copay), respectively.  Multivariate logistic regressions with robust clustered standard errors at the plan level were estimated.  RESULTS: Overall RA biologic use was 17% in the sample (10 % Part B and 7% Part D biologics).  Compared to full-LIS patients, non-LIS patients had lower odds of initiating any RA biologic in the year (OR 0.84, 95% CI 0.75-0.94).  Among biologic users, non-LIS patients were less likely to use a Part D biologic in the entire year (OR 0.19, 95% CI 0.15-0.24) and in the ICL-phase (OR 0.22, 95% CI 0.17-0.28).  CONCLUSIONS: High cost sharing due to specialty tiers and the coverage gap under Part D may be associated with non-LIS patients foregoing use of any RA biologic or substituting with infusible biologics under Part B.