The fields of pathology and clinical pharmacology are in an era of rapid evolution, reflecting continuous technological advancements in molecular diagnostics focused on improving drug efficacy and reducing toxicity. The discovery and refinement of the human genome sequence, further understanding of epigenetic events, and the expansion of proteomics research combined with emerging technologies such as functional imaging, biosensors, and sophisticated computational biology are having an unprecedented impact on the pharmaceutical industry. This review focuses on the discovery and development of DNA-based gene sequence tests and RNA-based gene expression profiles as applied to the prediction of response, resistance, and toxicity of both new and existing anticancer, cardiovascular, and anti-inflammatory drugs. This review will also consider the potential of emerging biomarkers designed to assist in the clinical development of these agents.