Today CNBC unveils the CNBC IQ100 Index, a first-of-its-kind rules-based index of large-cap companies that  derive substantial revenue growth through the use of protected, proprietary technology. It is powered by MCAM-International, a firm that maintains an unprecedented archive of documents related to patents, trademarks, copyrights and other intangible assets from 160 countries. A mix of MCAM’s proprietary algorithms comb the documents for relevant criteria and select the 100 index components. According to guidelines set by CNBC’s editorial team, at least 90 percent of index components must be selected from the Russell 1000 universe, while up to 10 percent may come from a mix of high-scoring international companies that trade in the United States as American Depository Receipts (ADRs), small-cap and mid-cap companies.

The companies in the index are weighted according to each one’s ability to invest in, develop, control and deploy intellectual property to achieve strategic advantage over competitors. Companies with the highest weighting maintain this type of advantage across multiple industries.

Johnson & Johnson is the highest-weighted stock in the index this quarter, followed by AMD and Amazon.

While J&J may not be the first company anyone thinks of when they hear the word “innovation,” the 130-year-old company is on the leading edge of everything — from baby shampoo to biosurgery. It has a history of continuously developing new products and reinventing existing  ones to grow its margins.

J&J spent more than $9.2 billion on R&D in 2015, or more than 13 percent of total revenues. (Compare that to Apple, which spent about $8 billion, or just 8 percent of total revenues on R&D.) According to J&J’s annual report, new products introduced in the last five years accounted for approximately 25 percent of 2015 revenue. And it attributed operational growth to new product launches in five different units of the company: baby care, oral care, surgery, vision care and women’s health.

The CNBC IQ100 helps prove that executives who invest time, money and human capital toward improving core competencies can deliver more value to customers, employees and shareholders. Despite surging stock buybacks and intense quarterly earnings pressure in today’s business landscape, companies that focus on material innovations protected with proprietary rights win over the long term.

The real proof is in the performance: In an analysis done by MCAM, the CNBC IQ100 outperformed the S&P 500 by an average of 5 percent going back to 2007.

The IQ100 is entirely rules-based. There is no committee, and therefore no human bias. The index will be reweighted quarterly and reconfigured once per year. Unlike the Dow Jones Industrial Average and the S&P 500, stock price and market capitalization are not factors in determining index weighting.

Today the 120-year-old Dow Jones Industrial Average stock index, composed of 30 large-cap stocks, is used by many economists to gauge the performance of the U.S. economy. However, most market watchers know the Dow is statistically flawed and suffers from outdated methodology and fails to fully account for how innovation drives U.S. economic growth.

Take the case of Apple, which wasn’t added to the Dow until March 2015. It was the world’s richest company long before then, but it couldn’t be added to the Dow, because the stock price was too high and could therefore skew the index. It took a 7-to-1 stock split of its own — and a coincidental stock split by Visa, another Dow component — to allow the committee that manages the Dow and other indexes to consider adding Apple.

Technology and America’s transition from a manufacturing-based to a services-based society has made the economy more complex and corporate growth harder to measure. Companies know how to value tangible assets like inventory and equipment, but there is no standard method for valuing intangibles like software patents and brand equity. The real drivers of margin growth, and in turn the sources of economic and employment growth, are hidden. The IQ100 is designed to find them and determine which companies benefit the most from the new market opportunities they identify, pursue, control and protect.

Much more about the CNBC IQ100 can be found in the  white paper written by MCAM, which lays out the methodology in detail and outlines the results of the back-tested performance.

Correction: A previous version of this story characterized the universe of stocks from which the CNBC IQ 100 are selected as exclusive to the Russell 1000. Complete details regarding the selection process can be found here.

I’m sure you’re familiar with the , which features private companies whose innovations are revolutionizing the business landscape.

But what about companies that are not necessarily leaders in disruptive technologies but are consistently innovative in their own space?

Today I want to introduce you to a new index: the CNBC iQ 100, powered by MCAM. It’s an index of 100 companies chosen from the Russell 1000, an index of the 1,000 largest companies in the United States. The index chooses 100 of those companies that are consistently innovative, updated on a quarterly basis.

What is innovative? These companies control price through market rights to original ideas or exclusive intellectual property. Traditionally, this means patents, trademarks and copyrights, but it can also mean trade-secret rights or even more hard-to-measure concepts, like water rights or pollution rights.

Why the emphasis on innovation? Because intellectual capital and intangible assets are critical to a company’s growth prospects, yet it turns out to be very difficult to reliably report on the value of innovation. In 2013, Bloomberg reported that as little as 7 percent of large corporations’ value is captured in tangible assets with more than 90 percent reflected in patents, brands, copyrights and other intangibles.

This is not a popularity contest. There is no human bias in the selection. Leaders are derived using a mix of algorithms developed by MCAM that search ALL public filing for relevant criteria. The stuff that matters — the intellectual property and other intangible assets — are compared qualitatively to the equivalent rights held by other firms; then the economic consequence of these assets on the underlying business is characterized.

And our No. 1 “innovation leader” is … Johnson & Johnson!

Johnson & Johnson? The health-care company? Band-Aids? Tylenol? Baby diapers? Sure, they make that stuff, but they’re also deep into pharmaceuticals, surgical equipment and diagnostics. In the language of innovation, they have market protection that gives price advantages in more verticals than most companies. And they are vastly diversified: You might spend less on baby oil, but you’ll spend more on diabetes-care products.

Bottom line: J&J competes across a broad range of business lines and is often the leader in each. It continually develops new products and reinvents existing ones and derives increasing revenue from those innovations.

Or take Amazon, which is often thought of as a proxy for retail. Not so, says MCAM founder and chairman David Martin. According to him, they are a retail supply-chain management company. They are not a traditional Wal-Mart or any other retailer. ”

The difference? Robotics, logistics and back-office technologies give them the ability to move more goods and services across more industries than anyone else. Because they own and control all of their supply-chain costs and do not have to rely on third-party vendor solutions, they have control over their cost basis.

Finally, you should take a careful look at the companies that are left out. Target, for example, is not there. Remember, they were involved in a massive data hack that harmed its efforts to develop proprietary advanced payment technology. They do not have any of their own internally developed supply chain. They have to get vendor input, and so their destiny is being dictated to them by outside partners.

Instead, Visa is a leader in that space. “Visa is not only a credit provider, they are a consumer analytics company,” Martin told CNBC. “Because of that, they can tell you what’s happening at a same-store sales level, providing that insight back to advertisers.”

What about tech? You’ll find Apple, Intel, Microsoft and IBM, but not Google. And no Facebook.

“Google is an advertising agency wrapped in the seduction of a search engine,” Martin said. “Their marginal revenue comes entirely from ads, not from technology. Their business is advertising; they are not a tech company.”

No Facebook?  At least, not yet, Martin said. Many would argue that Facebook is “innovative” in its approaches to numerous problems. But currently, almost all of those novel approaches have yet to yield substantial revenue. By its own admission, Facebook is best categorized as an advertising company, according to Martin. And the architecture and infrastructure that powers most of Facebook is built on systems owned by or licensed from other companies.

“As soon as Facebook derives substantial revenue from IP that it owns — Oculus, for instance — it will be considered for inclusion in the index,” Martin said.

Does innovation matter? Martin insists it does. His analysis concluded that the CNBC iQ 100 outperformed the S&P 500 by an average of 5 percent points going back to 2007.

Click here for a list of the 100 companies.

Tune in to CNBC’s “Closing Bell” on Friday, Aug. 26 at 3:30pm ET. David Martin will be on to discuss the real EpiPen scandal we should be talking about.

Mylan Pharmaceuticals deserves the attention it is getting. Heather Bresch, Mylan’s CEO has every reason in the world to have the smug press photos.  After all, she’s used the mortality of millions who suffer from sudden and acute allergic reactions and heart problems to line her own pockets and those of her investors (while squirreling cash outside the U.S. for tax evasion-like purposes).

Together with Wendy Cameron (Cam Land LLC and Trustee at The Washington Hospital from 2009-2011), The Honorable (retired judge) Robert J. Cindrich (Cindrich Consulting), Robert J. Coury, JoEllen Lyons Dillon (the Chief Legal Officer for the 3-D printing ExOne Company), Neil Dimick (retired EVP at AmerisourceBergen), Melina Higgins (former partner of Goldman Sachs), Douglas J. Leech (Founding Principal of DLJ Advisors), Rajiv Malik, Dr. Joseph C. Maroon (Neurosurgeon at University of Pittsburgh Medical Center), Mark W. Parrish (CEO of Trident USA Health Services), Rodney L. Piatt (Horizon Properties Group LLC), and Randall L. Vanderveen, PhD, R.Ph. (University of Southern California’s School of Pharmacy) – Mylan’s esteemed board of real estate developers, bankers, lawyers, medical educators, and corporate executives – her leadership has steered the company into the maelstrom of public controversy around the insanely expensive EpiPen®.

Bresch’s compensation rose 671 percent in 8 years. Media outlets should be doing their stories on the people I listed above, members of Mylan’s board of directors, who were willing to endorse a business strategy as ethical as arms dealers in Lord of War.

Let’s cut to the chase.  Bresch is at best guilty of hyperbole and at worst lying when she was quoted on CNBC saying that, “No one’s more frustrated than me.  My frustration is, the list price is $608. ”  In 2011, the same product sold for $164.  In 2007, it was available for $57.

Does she really want the public to believe that she’s frustrated that the Food & Drug Administration has been propping up her company’s monopoly on a technology and drug that’s been in the public domain since the 1950s?  Does she love to know that her firm is pocketing $1 billion for a technology that was acquired from Merck in 2007?  Does the public know that the FDA and Congress have willfully succumbed to the pressure of corporate America by ignoring their own rights to the technology?!

Let’s take a little journey down memory lane so that Iowa Senator Chuck Grassley, Presidential Candidate Hillary Clinton and Mylan’s contemplable board can get on the same page!

When George Calkins and Stanley Sarnoff invented the EpiPen forbearer in 1973, they acknowledged that their ideas were improvements upon work commissioned for the U.S. and U.K. military emergency medicine needs in the 1960s!  That the U.S. Patent Office granted their patent in 1973 was, at the time, a bit of a stretch as it was more about a mechanical design improvement – not a real invention.  This technology, used in the military and in EMS kits around the world was the basis for their company.

As the U.S. government was a principal buyer of anaphylaxis injector pens and funded a considerable amount of the technical improvements thereto, the U.S. government has march-in rights to use the technology at a reasonable commercial royalty rate it can set!

The U.S. government’s EpiPens don’t cost $608 per unit.  Meridian Medical Technologies – the Department of Defense’s supplier of the actual EpiPen (owned by Pfizer) – sell the same technology dispensing numerous anaphylaxis drugs to the U.S. government for under $50 a unit.

Epinephrine, the drug in the EpiPen has been off patent for decades. It’s the dispenser — the actual injection pen — that’s covered by a patent (U.S. Patent 7,794,432) that Meridian received and then licensed to Mylan (and others).

And let’s face it, Congress knows about this. The FDA knows this. And the reason why Mylan gets away with this – just like they get away with incorporating out of the U.S. using the dubious inversion strategy for tax efficiency – is because powers that be love to provide liquidity to their benefactors!

The U.S. Patent Office and the U.S. Food and Drug Administration have given Mylan license to extract excessive benefit from public that needs treatment options. Pfizer’s Meridian Medical is cruising along under the radar with a very clear statement on their website stating that their technology is “Available only for use by United States military personnel.”  And Sarah Jessica Parker is keeping the Hollywood face on the whole racket unaware that what she’s encouraging parents and school districts to do is really to enrich a dubious corporation while preying on real public fear.

Cut the crap.  This is another example of media hype around a faux well-spring of public activism around price gouging.  But let’s get real.  If we don’t want our kids to die from a bee-sting or a peanut, we should demand accountability where it’s really due – the Patent Office that granted an unjustified and unpatentable monopoly, the FDA which props up the illusion, and a board of directors at Mylan who don’t take the time to inform themselves of their own company’s misdeeds.

Commentary by David Martin, the founder of M-Cam, a global firm that advises companies and investors on corporate finance, asset allocation and valuing intellectual property. Follow him on Twitter @monkeyking67.

This commentary originally ran on InvertedAlchemy.com.  

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.