Conventional cost-effectiveness analysis identifies whether the incremental health generated by a medicine is sufficient relative to its incremental cost, but an average cost-effectiveness ratio does not identify how those health consequences are distributed. This methodological article develops an approach for making the distribution of recipient health, displaced health, financial-risk protection, and normative equity judgments explicit in medicines reimbursement. The analysis separates five inputs: subgroup-specific recipient health effects and costs; the magnitude and subgroup incidence of health displaced elsewhere by reimbursement expenditure; household financial-risk consequences; baseline health distributions; and explicit equity weights. Qualitative hypothetical reimbursement scenarios are used to examine situations in which interventions have identical average cost-effectiveness but differ in who gains health, who bears opportunity costs, and who receives financial protection. Efficiency, distributional health, and financial protection are retained as analytically distinct outputs before any normative aggregation. An average incremental cost-effectiveness ratio can be compatible with materially different distributions of health gain and health loss. Distributional conclusions depend not only on heterogeneity among recipients but also on assumptions about where displaced health occurs. Financial-risk protection can move independently of health outcomes, while alternative equity weights can alter reimbursement rankings without changing the underlying clinical or cost evidence. The qualitative scenarios therefore illustrate how a reimbursement decision can be unchanged, strengthened, weakened, or reversed once distributional information is introduced. Equity-informative medicines reimbursement requires more than applying an equity weight to the beneficiaries of a new medicine. The distribution of health opportunity costs and financial protection must also be made explicit. Reporting these components separately preserves transparency about efficiency, distribution, uncertainty, and normative judgment while avoiding an unvalidated composite measure of value.
