The limited international resources for economic aid and conservation can only mitigate poverty and losses of biodiversity. Hence, developing nations must establish the capacity to resolve their problems. Additionally, policy-makers and donors need to obtain scientific input on issues such as global change and ecosystem services. We propose that for nations rich in biodiversity, ecosystem services derived from bioprospecting, or drug discovery, could contribute to economic development. In the case where unstudied samples are shipped abroad for research, the chances of obtaining royalties are infinitesimally small. Therefore developing nations will only realize benefits from bioprospecting through in-country research on their own biodiversity. Policy-makers and donors have failed to appreciate the value of this approach. In order to provide an example of the inherent links between conservation and sustainable economic development, we initiated a drug discovery effort in Panama that emphasizes local benefit. As much of the drug discovery process as possible is conducted in Panamanian laboratories, providing jobs dependent on intact biodiversity and enhancing local research and training. In short, research, plus the spin-offs from research, provide immediate and long-lasting benefits to Panama. The connection between conservation and development has been highlighted in publicity about the project in Panama’s urban media. This provides a constructive alternative to the perception the among the urban populace that economic development inevitably competes with conservation. In summary, our program uses biodiversity to promote human health as well as to support research capacity, economic development and conservation within Panama. The program provides an example of the widely recognized but little developed concept of bioprospecting research as an ecosystem service.