In total, 25,420 articles were identified through database searches from Embase and MEDLINE, and 2895 were identified from EconLit. For Embase and MEDLINE, title and abstract screening were performed automatically using NLP, whereas articles from EconLit were screened manually. There were many duplicates because some journals are indexed in multiple databases and the same articles were retrieved 2–3 times; additionally, there were many instances where the only differences between articles retrieved were in the punctuation of the title, while the rest of the content was duplicated, and such cases were was identified during title/abstract screening. After removing duplicates from the records, the titles, and abstracts of 4229 unique articles were screened. In total, 706 articles were identified as being potentially relevant to the objectives of this review, and full texts of the publications were obtained. Articles were further excluded based on geography, resulting in the inclusion of 201 articles for the qualitative synthesis of different evaluations listed under the SPIDER criteria in Table 1. A detailed flow diagram of the study selection process is shown in Fig. 1. Considering the exhaustive information available from the 201 articles, we focused on articles that had definitions of innovation and incentives for understanding the different dimensions of innovation and the methods of promoting innovation. Evidence from 65 articles focusing on definitions of innovation and 32 articles on incentives (definitions provided in Table 4) to promote innovation (7 articles had both definitions of innovation and incentives) for a total of 90 articles are presented and their references are provided in Tables S4 and S6 in Online Resource 1.

Study selection Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) flow diagram. Abbreviation: SPIDER-sample, phenomenon of interest, design, evaluation, and research type

Innovation in health care is defined differently by different countries and regulatory authorities. Several criteria are used to define innovation using both health and non-health elements that incorporate clinical usefulness and the process through which innovation arises. A total of 65 instances from the USA, the UK, France, Germany, Japan, and “multi-country” were identified that defined innovation, with the most studies coming from the USA (33 articles), followed by the UK (9 articles), France (8 articles), Germany (4 articles), Japan (2 articles), and “multi-country” (9 articles). Any definition used by more than one country identified in an article is defined as “multi-country”. On average, five to six articles were published each year and of 65 articles, 38 (58%) were published from 2010 to 2015 and 27 (42%) were published from 2016 to 2020. Several articles referred to the US Food and Drug Administration’s (FDA) definition of innovation in the USA [21,22,23,24,25,26,27,28,29], the National Institute for Health and Care Excellence’s (NICE) including Kennedy’s short study for NICE in the UK [30,31,32,33,34,35,36,37] and the Amelioration du service medical rendu’s (ASMR, improvement of medical services rendered) in France [38,39,40,41,42]. The most common factor considered while defining innovation was therapeutic benefit as a measure of innovativeness across countries. The different studies describing the different definitions of innovation are summarized in Table S4 in Online Resource 1.

USA In the USA, an effective and safe treatment for a disease is defined as an innovative treatment [43], and innovation is defined in terms of new drugs that deliver substantial health benefits to patients and are approved by the FDA [41, 44]. Improvement or additional smaller health benefits over existing therapies are defined as incremental innovation [23, 26]. The FDA classifies new drugs according to the novelty of their chemical substance (new molecular entities or new active ingredients vs updates) and therapeutic potential, which determines the review speed (priority review for drugs fulfilling a high medical need vs standard review) [26]. Based on the FDA’s new drug review type classification, the innovation is further classified as radical, technological breakthrough, market breakthrough, and incremental innovation [23, 26]. Precision medicine in cancer treatment has been recognized by the FDA as innovation [27]. Recently, Smith et al. reported that transient conjugation technologies developed to address unmet needs have been expected to be known as an innovative approach [45].

UK In the UK, “innovation in the area where there is an unmet need that improves outcomes and ensures value for money to the National Health Service (NHS) with better access to effective medicines” is defined as innovation [46]. According to NICE, innovation is defined as a treatment that produces demonstrable and distinctive benefits of a substantial nature that may not be adequately captured in the quality-of-life measure used [31, 32]. Kennedy in his short study for NICE [30, 33, 34], suggested that innovation is something that is new, improves on existing interventions, and offers something more in the way of a step change in terms of outcomes for patients. According to Quinn et al, from the policy perspective, England’s Cancer Drugs Fund considers oncology products that offer substantial increases in overall survival (OS), and the magnitude of the OS benefit, as key elements in the definition of innovation [47].

France In France, a new drug is reimbursed after carefully reviewing its medical benefit and medical innovation. The level of innovation a drug brings to the market is determined by the drug’s improvement of medical benefit or ASMR compared to the current standard of care. The ASMR assigns ratings from I to V, based on the level of improvement; a drug with an ASMR level I, II or III is considered an innovative drug [38, 39]. Iordatii et al. define innovation as a new therapeutic option to treat a health problem for which there may already be an existing therapeutic arsenal that is targeting a disease, a symptom, or a risk factor. Innovation may lead to treatments that are easier to monitor, or doses that are easier to adjust for physicians [48]. According to Gonçalves et al, new therapeutic molecules that have the potential to radically transform the management and course of cancer, a product that—through a radical change—brings something new and that has the potential to constitute treatment in a situation where it did not exist previously or to improve clinically, can be defined as innovative. Also, an old drug for which new therapeutic activity has just been identified may be considered as innovative [49, 50].

Germany The German government considers innovative medicines as new therapeutic entities with additional benefits over existing treatments and that improve the quality of life in addition to offering good value for money. Whether innovative medicines have additional benefits is determined through early benefit assessment under the law within the statutory health care system (Arzneimittelmarktneuordnungsgesetz, AMNOG, English translation: "Pharmaceuticals Market Reorganization Act") by the German Federal Joint Committee (G-BA) [51]. Specialists groups classified innovative drugs as leap innovations, where a drug represents a completely new type of active ingredient, or as step innovations that can be a further development or improvement of a known active ingredient [52].

Japan In Japan, the Japan Pharmaceutical Manufacturers Association (JPMA) identifies any drugs discovered based on research and development (R&D), and employing advanced technologies that address patients’ needs and clinical needs, as innovative drugs [53].

Several definitions of innovation were identified in this review, and similar definition terms were grouped and mapped into ten different dimension categories, as shown in Fig. 2 and Table 5. Among the different dimensions of innovation, therapeutic benefit was the most frequently reported dimension (46 articles), including 100% of studies from Japan and the UK, followed by 89% from “multi-country”, 88% from France, 75% from Germany, and 52% from the USA. Other commonly reported dimensions of innovation were newness (32 articles), novelty (20 articles), cost (13 articles), and unmet need (12 articles). The least reported dimension was access, with only one article from the UK [46]. Administration is one of the least reported dimensions, with only five articles, of which three were from France, one was from the UK, and the other was “multi-country” [33, 40, 48, 49, 54]. Improvement in administration (formulation) of drugs for cancer and development of new antiretroviral drugs with simpler dosing regimens was identified from France [49, 55]. Country-wise assessments of included datasets about the definition and dimension of innovation are shown in Table S4 in Online Resource 1. A summary of the different dimensions and types of incentives identified across the SLR evidence is presented in Table S5 in Online Resource 1.

Dimensions of innovation, number of occurrences for identified definitions. Percentages are calculated as the proportion of articles that contributed to each dimension

A total of 32 articles were identified. Of these, 18 articles from the USA, 11 from “multi-country”, and 1 each from the UK, France, and Japan provided information on incentives for innovation, and different countries provided different incentives to encourage innovation, as shown in Table 6 and Table S6 in Online Resource 1. The different incentive categories “rewards and premiums, exclusivities, and priority/fast-track reviews” and their definitions are listed in Table 4 and the numbers by country are provided in Table 6.

Among the selected types of incentives, exclusivities formed the most reported category of incentive (21 articles). Exclusivities are patents to protect original compounds against generics, including incentives provided for innovations targeted towards pediatric populations and rare diseases (including orphan drugs). Among the 21 articles about exclusivities, 11, 10 and 5 articles mention exclusivities related to rare diseases, pediatric populations, and biologics, respectively. Rewards/premiums formed the second most common form of incentive, which captures any financial benefit provided for innovation, such as R&D tax credit, price premium, etc. (20 articles). Incentive for priority/fast-track review was found to be the area of least focus within our dataset (9 articles), as shown in Fig. 3. Only articles from the USA included all types of incentives. As per our findings, articles specific to one country showed that France includes four types of incentives except priority/fast-track review, and the UK and Japan include incentives associated with reward/premiums, while Germany included no incentives at all. However, 11 articles falling under the “multi-country” category showed a mixture of incentives, with 5 of 11 articles including exclusivities related to European Union (EU) law which apply to the UK, France and Germany [56,57,58,59,60].

Types of incentives considered for innovation. Percentages are calculated as the proportion of articles that contributed to each incentive

In the USA, several legislative programs (e.g., the Bayh-Dole Act, the Hatch-Waxman Act, the Orphan Drug Act, pediatric exclusivity protection, the FDA Modernization Act, the Affordable Care Act) have been enacted to offer incentives by providing mainly exclusivity to stimulate innovation [56, 57, 61,62,63,64]. The Hatch-Waxman Act (the Drug Price Competition and Patent Term Restoration Act in the USA) promotes filing for generic drugs with an abbreviated application. However, the Act provides each new approved drug 5 years of regulatory protection, that is “data exclusivity”, for new chemical entities and 3 years for new indication and dose-to-drug innovators as a trade-off [58]. Similar to this, the Biologics Price Competition and Innovation Act included in the Affordable Care Act allows abbreviated approval of “follow on” biologics while the Act provides 12 years of data exclusivity for new biologics [62]. The Orphan Drug Act provides 7 years of market exclusivity and 50% of a R&D tax credit. The pediatric exclusivity protection provides 6 additional months of market exclusivity if pediatric studies are requested and completed [24, 56, 58, 59, 61, 62, 65, 66]. Alexander et al. pointed out that apart from incentivizing new drugs/biologics, providing exclusivity for common disease drugs with unequivocal therapeutic breakthroughs could also stimulate the development of innovative therapies with substantial public health benefits [67]. The reward premium includes Medicare part D coverage, prescription drug insurance coverage in the USA, which was expanded to cover all drugs in 6 protected classes such as oncology drugs that fueled pharmaceutical innovation, and tax credit for R&D [41, 44, 58, 61, 65, 66, 68].

In the EU, including the UK, France, and Germany, the patent term can be extended through supplementary protection certificates up to a maximum of 5 years with a six-month extension for pediatric investigational plans [58]. The EU provides for a data exclusivity period of 8 years and 2 extra years for market exclusivity, and also provides 1-year potential extension of market exclusivity [56,57,58,59,60]. Orphan drug manufacturers in the EU stand to benefit from 10 years of orphan drug exclusivity that may extend up to 12 years (instead of 10.5 years) if pediatric trial data are included [58].

In France, the price setting and determining the reimbursement rate of drugs are the SMR and ASMR ratings that assess the medical benefit and the innovation rate of the drug. For innovative drugs with ASMR IV and I to III ratings, the price level will be maintained for 5 years and will not be lower than the price level in the 4 main countries: Germany, Italy, Spain, and the UK. Drugs with an ASMR rating from I to III and which are granted an extension of indication, and pediatric medicines based on a pediatric investigation plan, benefit from an extension of 1 year [69].

In the UK, according to Hughes, the nature of value-based pricing (VBP) will reward clinically useful innovative drugs at the highest prices they may command [70].

In Japan, there is a price premium system by MHLW to incentivize innovation and the Orphan Drug/Medical Device Designation System, which provides tax credit on research expenses, extended market exclusivity of 10 years, and a priority review [