Product innovation or business innovation? What should companies follow? Based on products and business innovation concepts and Concurrent Engineering (CE), Integrated Product Development (IPD), Stage Gates and Product Based Business (PBB), this paper presents an innovation reference model developed for Brazilian pharmaceutical companies. Qualitative research was conducted in six pharmaceutical companies in order to better understand their scenario and to compare their reality of innovation processes. The focus of this paper is to understand how these companies identify innovation opportunities (in the pre-development phase) and what constraints they face to implement them. Some comparisons are made among them and some recommendations concerning the innovation process are presented.