Drug development is a complex, lengthy and expensive process. Pharmaceutical companies and regulatory authorities have recognised that the drug development process needs optimisation for efficiency in view of the return on investments. Pharmacokinetics and pharmacodynamics are the two main principles determining the relationship between dose and response. This article provides an update on integrated approaches towards drug development by linking pharmacokinetics, pharmacodynamics and disease aspects into mathematical models. Gradually, a transition is taking place from a rather empirical approach towards a modelling- and simulation-based approach to drug development. The main learning phases should be phases 0,I and II, whereas phase III studies should merely have a confirmatory purpose. In model-based drug development, mechanism-based mathematical models, which are iteratively refined along the path of development, incorporate the accumulating knowledge of the investigational drug, the disease and their mutual interference in different subsets of the target population. These models facilitate the design of the next study and improve the probability of achieving the projected efficacy and safety endpoints. In this article, several theoretical and practical aspects of an integrated approach towards drug development are discussed, together with some case studies from different therapeutic areas illustrating the application of pharmacokinetic/pharmacodynamic disease models at different stages of drug development.