The value of undiscovered pharmaceuticals in tropical forests
- Cite this article as:
- Mendelsohn, R. & Balick, M.J. Econ Bot (1995) 49: 223. doi:10.1007/BF02862929
Previous estimates of the potential value of higher plants in tropical forests for Pharmaceuticals are too high because analysts mistakenly used gross revenues to value drugs instead of net revenues. Correcting this error, we estimate each new drug is worth an average $94 million to a private drug company and $449 million to society as a whole. Given recent experience searching for new drugs, we estimate that the higher plants in the world’s tropical forests contain about 375 potential pharmaceuticals of which 48 (about one in eight) have already been discovered. Multiplying these values by the number of potential new drugs suggests that a complete collection and screening of all tropical plant species should be worth about $3–4 billion to a private pharmaceutical company and as much as $147 billion to society as a whole.