BACKGROUND: Health economic evaluation systematically analyzes all inputs and outputs of treatment, and suggests the most effective alternatives for given resources. Results of a cost-effectiveness analysis are summarized in a series of cost-effectiveness (C/E) ratios. Little is known about the distributions of C/E ratio estimates. Hence, there is a lack of statistical tests for the C/E ratios. OBJECTIVE: This study is to describe the characteristics of C/E ratio distribution. Since the cost and effect distributions frequently follow the normal, lognormal, and gamma distributions, the ratio distributions are formed by some combination of them. METHODS: In describing the ratio distribution, the probability density functions (PDF) of the ratio distributions are derived if they exist. If the closed form of the PDF does not exist, the ratio distributions are presented graphically. RESULTS: First, the ratio distributions take on a variety of shapes depending on the coefficient of variation of their denominator distribution. Most of the time, the ratio distributions have the bell shape with, or without, a heavy right tail. However, the ratio distribution could even be bimodal if the coefficient of variation of denominator was very large. Second, the correlation between numerator and denominator of the C/E ratio significantly affects the distribution shapes and locations. Since the numerator and denominator are allowed to be correlated, this derived PDF is more general and practical than the Cauchy distribution. Third, the ratio distributions formed from the combination of gamma and lognormal distributions are all skewed to the right. CONCLUSIONS: The C/E ratio distributions are not always bell shape nor symmetric. The ratio distributions take on a variety of shapes depending on the coefficient of variation of their denominator distribution and the correlation coefficients between numerator and denominators.