Montego Bay Pharmaceutical Bioprospecting Valuation

Montego Bay Pharmaceutical Bioprospecting Valuation

Primary Country: Jamaica
Ecosystem: coral reef
Sample Value Estimates:
NPV of bioprospecting of coral reef in Montego Bay, Jamaica
  1. 1998 $233 million: mean
  2. 1998$ 173 -354 million: range
Methodology: Theoretical modelling
Region: Americas
Data source: NOAA's Coral Reef Valuation Database

Publication information

Cartier, C. Ruitenbeek, J. “Montego Bay Pharmaceutical Bioprospecting Valuation” In Integrated Coastal Zone Management of Coral Reefs: Decision Support Modeling Eds. Gustavson, K., Richard, M. H., and Ruitenbeek, J. The World bank, Washington DC., 2000

Addtional Notes

Theoretical model based on assumption used for parameters. Parameters include the cumulative probability of developing a commercial drug from a given sample, expected future value of commercial drug net of R&D costs, length of the R&D period, individual sample costs, and a discount rate (10% real), the number of species in an area, the number of samples available for any given species, the contingent royalty on final drug sales expressed as a net profit share, a per sample fee that involves a transfer to local authorities for sample collection, and institutional costs attributable to collection.Book Chapter

Cartier, C.//Ruitenbeek, J.

2/2000

Montego Bay Pharmaceutical Bioprospecting Valuation

Eds. Gustavson, K., Richard, M. H., and Ruitenbeek, J.

Integrated Coastal Zone Management of Coral Reefs: Decision Support ModelingThe World Bank

Washington, DC

pp. 67-82

pharmaceutical/bioprospecting/coral reef/revenue/biodiversity

Two issues were seen as paramount to the valuation of pharmaceutical bioprospecting. The first was the valuation approach and that the chosen methodology be capable of capturing the "information" obtained from these organisms in addition to the organism itself. The second was that institutional structures and revenue or rent sharing arrangements are key influencing variables in the valuation of marine products. Key valuation issues include gross versus net values, social versus private values, average versus marginal values, redundancy, the treatment of phase specific costs and revenue sharing. The decision was made in favor of a model of average social net returns using localized cost information for Jamaica and benefit values and success rates based on proprietary information for marine products in the Caribbean. While many of the models in the literature isolate terminal values of the R & D change, the model here is regarded as a current ecosystem planning model and thus discounts all values to the present, using the sample as the initial basis of analysis. Based on a previous base study, results were a range of US$173 million to US$354 million with a mean of US$233 million (NPV 1998 dollars), based on a theoretical model based on assumption used for parameters. Parameters include the cumulative probability of developing a commercial drug from a given sample, expected future value of commercial drug net of R&D costs, length of the R&D period, individual sample costs, and a discount rate (10% real), the number of species in an area, the number of samples available for any given species, the contingent royalty on final drug sales expressed as a net profit share, a per sample fee that involves a transfer to local authorities for sample collection, and institutional costs attributable to collection.

Estimates of pharmaceutical bioprospecting values based on a theoretical model.

Montego Bay, Jamaica

Coral Reef

Pharmaceutical Bioprospecting

None.

1996

Range of US$173 million to US$354 million with a mean of US$233 million (NPV 1998 dollars)

n/a

n/a

Theoretical model based on assumption used for parameters. Parameters include the cumulative probability of developing a commercial drug from a given sample, expected future value of commercial drug net of R&D costs, length of the R&D period, individual sample costs, and a discount rate (10% real), the number of species in an area, the number of samples available for any given species, the contingent royalty on final drug sales expressed as a net profit share, a per sample fee that involves a transfer to local authorities for sample collection, and institutional costs attributable to collection.

0n/a

Peter C. Wiley

Information provided when available, for more information please visit the original database or PDF.