While herbal medicines hold great promises for treating diseases, they also have serious limitation in their current forms. Currently the regulatory scheme for herbal medicines in the United States is inadequate and it undercuts the incentives for American industry to develop drug products from herbal medicines. This paper argues that FDA should develop a drug model for herbal medicines. This will help both to mainstream herbal medicines in the United States, and to alleviate the production crisis that the American pharmaceutical industry is facing. This paper also assesses FDA~{!/~}s new Draft Guidance for Botanical Drug Products for its incentivizing effects on the industry.