Biopharmaceutical innovation represents a continuous and virtuous cycle of scientific improvements, as explained by the authors of a 2025 report by the Information Technology and Innovation Foundation (ITIF), the leading think tank on innovation policy. The report gives various examples of how pharmaceutical follow-on innovations – often interchangeably referred to as ‘incremental’ or ‘continued’ innovations – are key to advancing healthcare in the U.S. The report also highlights misconceptions about follow-on innovations and the intellectual property system that supports them.
What are follow-on innovations?
Follow-on innovations are medical advances that further develop ‘first-in-class’ medications by expanding the types of conditions that can be treated, bringing the medicine to new patient populations, or improving the existing medication that makes it safer or improves the patient experience. ITIF outlines different types of research that commonly fall under follow-on innovation:
Beyond convenience
Advances through follow-on innovation, such as reformulating a drug from an injection to a tablet, require years of R&D and can help deliver meaningful improvements in safety, adherence and access for patients and caregivers. Some critics argue that pharmaceutical companies can manipulate the marketplace, switching patients to new drugs with marginal improvements to extend exclusivity.
Such claims misrepresent the reality of the rigorous and multifaceted processes by which medicines are evaluated and adopted by payers, prescribers and patients in the U.S. The introduction of new treatments is governed by evidence-based medical guidelines, comprehensive formulary reviews, prescribing protocols, and robust utilization management. America’s managed care pharmacy system is designed to ensure that innovations delivering genuine clinical, economic, patient, and caregiver benefits prevail in the marketplace.
Another common misconception is that follow-on patents extend earlier patents. Follow-on patents do not extend patents for an existing drug but rather protect improvements, such as a new formulation of the drug that allows it to be administered in a different way. Once the patents to the original drug expire, generics are free to enter the market.
The evidence documented by ITIF is clear: Follow-on innovation can profoundly impact patient lives. It confirms that the value of biopharmaceutical innovation should be measured using a holistic approach that accounts not just for scientific and technological processes, but also for the perspectives of patients, caregivers, payers and employers. With respect to follow-on innovation, the report explains:
- Follow-on innovation can deliver significant advantages for patients, offering therapies that are better aligned with individual needs and often featuring improvements in effectiveness and safety, which can help support better quality of life and help encourage consistent treatment use. These improvements not only benefit patients but may also ease the load on caregivers, minimize work absences related to illness and boost overall productivity.
- For payers, increased competition from follow-on drugs widens treatment options, enables negotiation and can drive down medication costs. From a public health viewpoint, improved adherence can lead to reduced mortality rates, extend life expectancy and may result in better outcomes, including avoiding the need for more costly approaches, such as hospital stays and surgery.
- For the healthcare system, continued investment in post-approval research can lead to innovations that relieve the burden by improving efficiency, such as through less frequent dosing and simplified monitoring.
- Finally, for communities across the U.S., R&D investment in post-approval research doesn’t just yield positive public health impacts, it can also produce high-quality jobs, improve labor productivity and generate economic growth.
What happens next, matters
The ITIF report documents that continued investment in post-approval research is vital, as follow-on innovation can contribute significantly to public health and economic growth. Expanding the range of drugs within a therapeutic class broadens patient choices and fosters competition, leading to cost savings for employers and taxpayers. As the report explains, if follow-on innovations and post-approval research offered no meaningful value, payers and pharmacy benefit managers (PBMs) would have little reason to cover them over existing treatments.
ITIF details examples of U.S. policies that have encouraged follow-on innovation. They include the Best Pharmaceuticals for Children Act (BPCA) and the Orphan Drug Act (ODA). But the report also warns that policies built on harmful misconceptions about intellectual property could reduce the ability to develop and protect follow-on innovations. It is thus important to understand that (1) patents protecting follow-on innovation are subject to the same rigorous legal standards as “primary” patents; (2) simply having a patent does not guarantee that the market will adopt follow-on drugs if they don’t deliver value to patients; and (3) patents protecting follow-on innovation do not extend patents covering the original drug, or “delay” generic entry, for the original drug.
Instead of weakening intellectual property protections in the U.S., policymakers should advocate for fair and balanced partnerships globally, including strong intellectual property (IP) protections that ensure U.S. companies can compete fairly in international markets.
Barbosu S. The Value of Follow-On Biopharma Innovation for Health Outcomes and Economic Growth. Information Technology & Innovation Foundation (ITIF). Published online March 17, 2025. https://itif.org/publications/2025/03/17/the-value-of-follow-on-biopharma-innovation/
Transparency: J&J Innovative Medicine is an annual sponsor of ITIF, an independent 501(c)(3) nonprofit, nonpartisan think tank. ITIF maintains full independent control over its research programs, engagements with experts and published reports.