Model-based drug development (MBDD) has been recognized as a concept to improve the efficiency of drug development. The acceptance of MBDD from regulatory agencies, industry, and academia has been growing, yet today's drug development practice is still distinctly distant from MBDD. This manuscript is aimed at clarifying the concept of MBDD and proposing practical approaches for implementing MBDD in the pharmaceutical industry. The following concepts are defined and distinguished: PK-PD modeling, exposure-response modeling, pharmacometrics, quantitative pharmacology, and MBDD. MBDD is viewed as a paradigm and a mindset in which models constitute the instruments and aims of drug development efforts. MBDD covers the whole spectrum of the drug development process instead of being limited to a certain type of modeling technique or application area. The implementation of MBDD requires pharmaceutical companies to foster innovation and make changes at three levels: (1) to establish mindsets that are willing to get acquainted with MBDD, (2) to align processes that are adaptive to the requirements of MBDD, and (3) to create a closely collaborating organization in which all members play a role in MBDD. Pharmaceutical companies that are able to embrace the changes MBDD poses will likely be able to improve their success rate in drug development, and the beneficiaries will ultimately be the patients in need.