Innovation is the lifeblood of the big pharma industry. Without a robust drug development pipeline and ground-breaking medications that make their way through the complex FDA approval process, pharmaceutical companies would not be able to survive. While each major drugmaker boasts a crown jewel in its pipeline, however, few can rival Swiss pharma company Novartis (NVS 0.72%) when it comes to developing innovative drugs. The company currently has three experimental drugs with the FDA's coveted "breakthrough therapy designation" and has several attractive assets in its pipeline.

In the following video, Bernard Munos, the founder of the InnoThink Center for Research in Biomedical Innovation, discusses the key to Novartis' (NVS 0.72%) success -- namely its culture of innovation -- with analyst Max Macaluso. A transcript follows the video.

Novartis isn't the only dividend stock you need to watch
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Max Macaluso: Do you think Novartis has maintained this culture of innovation, maintained this culture of looking for breakthrough therapies?

Bernard Munos: Very much so. Very much so. This is the old model, where the scientists have a lot of freedom to use all the creativity that they can muster to come up with drugs that will make a difference; drugs that will cause the physician to change their standard of care. They've contributed -- since Novartis was created in 1996 -- over 20 such drugs. They haven't had one approved this year yet ... we still have six weeks to go.

But it is still one of the most innovative pharmaceutical companies of the last 15 years, so it clearly has worked. It's the old pharma model: Hire the smartest scientists you can find and let them be as creative as they can. Bring their innovation to market and hope to do it often enough that you have a steady supply of new, breakthrough drugs. That's one model.