Patent valuation has raised tremendous concern from the research-based pharmaceutical industry for a long time. Questions about the valuation of drug patent portfolios, determinants of success of pharmaceuticals launches, assessment of research and development (R&D) performance or innovation output, and competitive position of different firms in the industry all tend to revolve around the basic question on pharmaceutical patent valuation. Over the past decades, a considerable number of studies on patent valuation were conducted, which mainly focused on general and multi-industry patents and do not usually factor in the technological parameters in order to ensure wide validity for various industries. However, as far as the research-based pharmaceutical industry is concerned, technology factors are critically essential for evaluating patents. In general, there has so far no been effective patent valuation method specifically designed for pharmaceuticals. This research aims to establish a patent valuation model specifically focusing on drugs based on established patent valuation methods and comprehensive considerations on pharmaceutical technology factors and to explore its potential applications to the industry. Our model comprehensively involves various variables, including number of citations received, patent challenge, number of claims, number of citations made, blockbuster drug, patent portfolio, new dosing schedule, new indication, new combination, new chemical entity (NCE), new dosage form, new product, new strength, orphan drug, pediatric drug, and grant year. In this model, all indicators of patent value could be available early in a patent’s life at little cost from public patent data banks. In order to cover a wide range of pharmaceutical patents and ensure the validity of the research outcome, the research sample is composed of all patents listed in the 21st edition Orange Book, which has a total of 913 patents granted by U.S. Patent and Trademark Office (USPTO). The data come from four sources: patent database of National Bureau of Economic Research (NBER), Orange Book of Food and Drug Administration (FDA), legal status database from International Patent Documentation Center (INPADOC), and global blockbuster drug database from Pharmaceutical Digital Library (PHARMADL). Through multiple regression analysis, it is found that Pharmaceutical Technology Details Indicators (PTDI) significantly influence pharmaceutical patent value and, more importantly enhance the quality of existing valuation methods. Moreover, the marginal effect of individual predictor on patent value is quantitatively measured as follows, respectively: (1) the expected value for an opposed patent is about 34% higher than for a non-opposed patent, holding other factors constant; (2) a one-unit increase in the number of claims increases the value by 2%; (3) a one-unit increase in the number of citations made increases the value by 1%; (4) the expected value for a patent of blockbuster drug is about 17% higher than for a patent of common drug, holding other factors constant; (5) a one-unit increase in the size of patent portfolio increases the value by 3%; (6) new indication increases the expected patent value by 25%; (7) new combination decreases the value by 26%; (8) NCE increases the value by 62%; (9) new dosage form increases the value by 60%; (10) new product increases the value by 57%; (11) new strength decreases the value by 12%; (12) orphan drug decreases the value by 7%; (13) pediatric drug decreases the value by 10%; and (14) a one-year increase in the patent age decreases the value by 16%. These results are basically consistent with theoretical predictions and further demonstrate the validity of new value indicators and this model. As is well known, NCE is all along the darling of the pharmaceutical industry because it generally represents original research and innovative technique which drive the development of the research-based industry. In this model, NCE actually plays the role of the strongest positive factor influencing the expected patent value. On the contrary, orphan drug and pediatric drug show significantly negative effect, which could be rationally interpreted by small patient population of these drugs. In addition, based on a consideration on 20-year patent term, the residual value of a patent in the model after 20 years roughly equals 3% coincident with the fact that the value of patent rights decays to zero when they expire. In this sense, .16 could be roughly considered the yearly depreciation rate of patent value. In addition to set up this pharmaceutical patent valuation model, potential commercial application of this model is explored in the following context: technology innovation and intellectual property valuation of Chinese Medicine, pharmaceutical patent valuation in China, the assessment of innovation output and firm performance, and blockbuster methodology and pharmaceutical valuation. Firstly, this method is explored to assess technology innovation and intellectual property of Chinese Medicine through the analysis on two potential patent technologies on Chinese Medicine. Secondly, it could be clearly showed that commercial transactions involving pharmaceutical patent valuation, for example, technology innovation and transfer, as well as patent protection and licensing have been becoming more and more frequent, when China's pharmaceutical market is growing rapidly and shifting greatly. Patent valuation model specifically focusing on drugs could be widely applied to the evolving pharmaceutical market in China. Thirdly, in view of the wide implications of pharmaceutical patent value, this method shows the wide and potential application to assess innovation output and firm value in the pharmaceutical industry. Finally, on a basis of empirical study, this method is applied to evaluate pipeline drugs and to identify blockbuster drugs at an early stage in terms of the close ties between pharmaceutical patent value and pharmaceutical product value. Key Words: Pharmaceutical; Patent valuation; Chinese Medicine; Technology innovation