Measuring Biopharmaceutical Innovation in the Modern Era

As the Inflation Reduction Act empowers Medicare to negotiate drug prices based in part on clinical benefit, and as the FDA more closely scrutinizes accelerated approvals, a fundamental question has become increasingly important: what exactly constitutes “innovation” in biopharma?

To date, our answers have largely focused on counting—company R&D investment, drug approvals, and patents. But such metrics can favor quantity over quality, making it harder to distinguish between transformative and incremental advances. Relying on them alone risks misallocating resources, weakening patient outcomes and healthcare sustainability, and overlooking high-value therapies.

Complementary measures of innovation aim to capture dimensions traditional metrics overlook, such as clinical effectiveness, societal benefit, and equitable access. Some emphasize broader value—including scientific spillovers, greater access, and long-term public health gains—while others highlight the gap between discovery and usable therapies.

Still, there is no unified, broadly applicable framework that integrates the full spectrum of biopharma innovation—from traditional volume-based indicators to value-oriented measures such as therapeutic effectiveness, real-world impact, and policy relevance.

To address this gap, we systematically reviewed interdisciplinary literature on innovation metrics to identify a comprehensive set that captures clinical, economic, and societal value. The resulting rubric is designed to be both rigorous and practical—providing strategic guidance for those who develop, evaluate, fund, and benefit from biopharma innovation.

A Multidimensional Innovation Rubric

Our systematic literature review identified innovation metrics in 2,350 articles across medicine, public health, economics, strategy, finance, and operations, of which 617 were relevant to biopharmaceuticals. From them, we constructed a six-dimensional rubric to comprehensively evaluate biopharmaceutical innovation from early discovery to real-world implementation:

• Scientific and Technological Advances: Captures innovation and productivity using metrics such as NMEs, IND applications, and patents. Emerging indicators such as AI-enabled R&D and digital biomarkers offer forward-looking insights.
• Clinical Outcomes: Highlights therapeutic impact through metrics such as safety, efficacy, and patient-reported outcomes, emphasizing real-world patient benefits and delays in disease progression.
• Operational Efficiency: Measures efficiency in development and production using trial success rates, R&D timelines, supply chain resilience, and adaptive trial designs.
• Economic and Societal Impact: Evaluates economic returns and societal benefits through cost-effectiveness analyses, budget impacts, and productivity improvements.
• Policy and Regulatory Effectiveness: Assesses how regulatory frameworks support innovation through approval speed, breakthrough designations, and surrogate endpoint integration.
• Public Health and Accessibility: Examines broader health impacts, including reduced disease incidence, healthcare access improvements, and equitable geographic distribution, ensuring innovations meet widespread public health needs.

Stakeholder Perspectives: Making the Rubric Actionable

Our rubric specifically addresses five critical stakeholders in the biopharmaceutical ecosystem—pharmaceutical companies, investors, payers (including insurers and healthcare providers), patients, and policymakers. Each group shapes and benefits from innovation, requiring tailored metrics aligned with their strategic objectives and operational contexts.

Fig. 1 Adoption of Innovation Metrics by Stakeholder Groups.

Notes: This figure illustrates current practices and opportunities across six dimensions of biopharmaceutical innovation metrics. Solid circles (🔵) indicate commonly used metrics, while open circles (◯) highlight potential metrics currently underutilized.

Figure 1 illustrates how stakeholders currently measure innovation and where gaps exist that emerging metrics could fill. Today, they strongly rely on traditional metrics like NMEs, patents, and financial indicators, which are straightforward, easily quantifiable, and historically established. However, they have lagged in adopting emerging metrics that offer nuanced insights into patient-centered outcomes, long-term societal benefits, and healthcare access. Metrics identified as “potential” emerged consistently from recent literature and stakeholder discussions, reflecting their growing recognition and practical feasibility. Key findings include:

• Pharmaceutical companies primarily use scientific and operational metrics—such as NMEs, patents, and R&D efficiency—to guide investments and manage portfolios. Expanding focus to patient-reported outcomes could improve market forecasts and strategic choices. For example, a biotech firm developing an mRNA platform might seem undervalued by NME counts, but recognizing the platform’s flexibility and future potential reveals significant strategic value.
• Investors typically assess innovation through financial metrics (projected revenues, profitability) and technological indicators (patents, platforms). Incorporating societal productivity gains, regulatory compliance, and geographic reach can better align investments with long-term impact and reduce risk. This could lead an apparently risky investment in a potential Alzheimer’s therapy to become more attractive when considering long-term productivity gains and reduced caregiving burdens.
• Payers focus on clinical effectiveness and economic value (cost-effectiveness, pricing alignment) in reimbursement decisions. Including metrics like adherence rates, healthcare utilization, and operational reliability could further support coverage. The proposed rubric would formalize analyses already applied to one-time gene therapies that, despite high upfront costs, may show superior long-term value when accounting for lifetime savings, improved adherence, and fewer hospitalizations.
• Patients prioritize clinical outcomes—safety, efficacy, quality of life—and access. Real-world evidence, geographic availability, and timely market access help them advocate for improvements. For example, a biologic for autoimmune conditions may modestly extend life but substantially improve daily functioning. Patient-reported outcomes and adherence data capture this added value.
• Policymakers use public health and economic outcomes to guide resource allocation. Metrics like supply chain resilience and regulatory responsiveness improve preparedness. Incorporating these metrics into an innovation framework would formally capture the strategic and public health value of an otherwise commercially unviable antimicrobial drug.

Adopting a multidimensional framework introduces trade-offs, including added complexity, resource competition, and potential conflicts among metrics. Stakeholders must prioritize dimensions aligned with their strategic goals and regulatory contexts. For example, payers might emphasize clinical and cost-effectiveness, while pharmaceutical companies may prioritize operational efficiency and scientific productivity.

Redefining Biopharmaceutical Innovation

Next steps include piloting the framework in health technology assessment (HTA) case studies, aligning metrics to each dimension, and incorporating stakeholder input to refine usability. The goal is not to replace existing evaluation systems, but to enhance them with a multidimensional structure grounded in cross-sector evidence.

The rubric broadens how we define innovation—incorporating clinical effectiveness, patient-centered outcomes, and broader societal impact alongside traditional volume-based indicators. If policymakers and payers adopt these complementary metrics in evaluation and reimbursement frameworks, they can better align investment and R&D incentives with high-value, transformative innovation. Emphasizing long-term health outcomes, real-world effectiveness, and broader economic value would bring innovation policy closer to patient needs and societal priorities. These shifts would help ensure that innovative therapies are recognized for both their scientific and real-world impact.