Economic considerations

Medicinal plants already contribute substantially to the poor people's well-being and will continue to do so. Indeed, without recourse to medicinal plants it seems unlikely that the vast majority of peoples in developing countries will ever be able to meet their primary healthcare needs.

Two separate commerces in medicinal plants, the formal and informal markets, co-exist side by side. The first is regulated by governments (at least to some extent) and provides both crude and processed herbal products to the public with a certain measure of quality control. The informal market, on the other hand, operates without oversight. It provides basic healthcare needs to the majority of peoples in many developing countries but without consumer protections.

The informal market is extremely difficult to evaluate. Many healthcare needs are provided without a cash transaction. Instead payment is made in labor or other "in-kind" services. Furthermore, the unregulated informal market has yet to recognize the need to be involved in conservation programs. Neither China nor India have any comprehensive understanding of the extent or economic value of the informal market - a commerce that must contribute billions of dollars annually to their economies. As difficult as it might be to document these transactions, attempts must be made, even if they result in only rough estimates.

The case has been made recently that the market returns from bioprospecting are insufficient and the incentives for habitat conservation by private pharmaceutical research to be modest. Such might be the case for multinational pharmaceutical companies. However, such is not the case for the established traditional pharmaceutical companies. for the foreseeable future, they will rely totally on medicinal plants for drug preparation. Consequently their incentives to be involved in conservation and cultivation are legitimate and economically necessary. At the same time it has been suggested the need for new economic models and strategies for the world's agricultural and pharmaceutical industries offers opportunities for enlightened bioprospecting that replaces the spectrum of paternalism with the spectrum of equity.

Recognizing the needs of pharmaceutical industries (where present) to meet the increasing public demand for plant-derived drugs, every effort must be made to promote sustainable production and procurement of unadulterated raw material. The economic advantages of using domestic raw materials must consider job creation opportunities in agriculture and industry, and the availability of affordable plant-derived drugs for healthcare. Financial investment in the establishment of developing country R&D capability should encourage a greater interest for conservation and cultivation by local pharmaceutical industries.

Apparently no studies have been carried out in either China or India to document total annual tonnage purchased, sustainability of raw material supply, future trends in hospitaland consumer use, and industry growth potential. Neither is there any information to identify the precise problems facing the industry.

Even though the trade cannot be quantified, some measure of its size can be deduced by considering what would happen if supplies of medicinal-plant raw materials were eliminated. The local (and especially poor) populations would have to rely on synthetic drugs-local and/or imported. The result would be a potentially catastrophic blow to productivity, balance of payments, national debt and gross domestic product.