A series of "prospective notes", on various areas of technological research, has been published by the Institute for Prospective Technological Studies (IPTS), part of the Community's Joint Research Centre. The third note in the series concerns exotic biological resources for new drugs and examines issues surrounding the use of extracts from living organisms for the development of new drugs. Only a few of the vast number of species existing on our planet have so far been tested for possible pharmaceutical applications. The Third World is the main repository for biological resources whereas the main marketers for drugs are in Europe and America. Since the Rio Conference in 1992, commercial companies have been put under increasing pressure to give compensation for access to biological resources. At the same time, the value of natural products is subject to increasingly stiff competition from compounds deriving from extremely effective new synthesis technologies. Natural products, however, have the edge over synthetically produced compounds in that they offer unlimited structural diversity and an unlimited mix of compounds. True innovative products are, therefore, expected to come from nature and not from combinatorial chemistry, at least for the next few years. The IPTS identifies the following main areas for further focused study: - Current and prospective future trends of the competitive position of natural products in drug development, in comparison to new synthesis techniques, genetic approaches and drug design; - Attitudes of developing countries resulting from the on-going negotiation of the implementation of the biodiversity convention, in particular regarding the price of natural resources; - Policy options for north-south cooperation in biodiversity prospecting, guaranteeing equitable benefit and avoiding the exclusive sell-out of biological resources; - Elements of a research strategy which would increase the effectiveness of the search for new drugs from nature.