Adverse drug reaction in patients causes more than 2 million hospitalizations including 100,000 deaths per year in the United States. This adverse drug reaction could be due to multiple factors such as disease determinants, environmental and genetic factors. In order to improve the efficacy and safety and to understand the disposition and clinical consequences of drugs, two rapidly developing fields--pharmacogenetics (focus is on single genes) and pharmacogenomics (focus is on many genes)--have undertaken studies on the genetic personalization of drug response. This is because many drug responses appear to be genetically determined and the relationship between genotype and drug response may have a very valuable diagnostic value. Identification and characterization of a large number of genetic polymorphisms (biomarkers) in drug metabolizing enzymes and drug transporters in an ethnically diverse group of individuals may provide substantial knowledge about the mechanisms of inter-individual differences in drug response. However, progress in understanding complex diseases, its negative psychosocial consequences, violation of privacy or discrimination, associated cost and availability and its complexity (extensive geographic variations in genes) may become potential barriers in incorporating this pharmacogenetic data in risk assessment and treatment decisions. In addition, it requires increased enthusiasm and education in the clinical community and an understanding of pharmacogenetics itself by the lay public. Although individualized medications remain as a challenge for the future, the pharmacogenetic approach in drug development should be still continued. If it becomes a reality, it delivers benefits to improve public health and allow genetically subgroup diseases thereby avoiding adverse drug reactions (by knowing in advance who should be treated with what drug and how).