We have made remarkable progress in our understanding of the pathophysiology of cancer. This improved understanding has resulted in increasingly effective targeted therapies that are better tolerated than conventional cytotoxic agents and even curative in some patients. Unfortunately, the success rate of drug approval has been limited, and therapeutic improvements have been marginal, with too few exceptions. In this article, we review the current approach to oncology drug discovery and development, identify areas in need of improvement, and propose strategies to improve patient outcomes. We also suggest future directions that may improve the quality of preclinical and early clinical drug evaluation, which could lead to higher approval rates of anticancer drugs.