In spite of the cost reduction policy of the health care system and drastic restrictions imposed by public health and environmental authorities, the development of innovative remedies is still the basis for growth and success of pharmaceutical companies. This also concerns the producers of extracts and herbal medicinal products. In this report the so-called basis and step innovations have been defined and adequate examples have been presented. An essential prerequisite for the development of such innovative herbal medicinal products is the preservation of reimbursement by state health plans. Owing to their good tolerability, herbal medicinal products are an indispensable alternative to chemical-synthetic drugs, especially in the long-term treatment of chronic diseases. As the intended exclusion of non-prescription medicines from reimbursement by state health plans (German health care system modernisation Law) primarily concerns the innovative HMPs, future development in this field seems to be hindered or even blocked. On account of the high costs of development as well as the incalculable investment risks described in this report, future development of herbal medicinal products will only be affordable for extract and herbal medicinal product manufacturers if an essential political and legal framework of the health care system is guaranteed on a European level.