I believe it is the other way around -- a drug cannot be patented by structure, but only by process to create the structure.
Process is most definitely patentable; that's what large percentage of patents are about.
A big proportion of patents are, in fact, improvements upon prior patents. That a big part of what patent research is about. You have to name all the patents that your work is relying upon; it's called "prior art". When a patent holder collects royalties, all unexpired prior art is entitled to royalties as well.