Physicians prescribing drugs are routinely confronted with the balance between efficacy and toxicity. Pharmacogenetics involves the study of how inheritance influences response to drugs, and its goal is to enable the appropriate selection of these individuals, thus eliminating unpredictable responses. Pharmacogenetics can be used to identify target populations that either will have minimal benefit or a better outcome including better survival or improvement in surrogate end points. As we move towards common use of targeted therapies, the future of medicine will involve an examination of the interplay between multiple genetic factors, as the response to drugs is likely to be complex and polyfactorial especially in chronic diseases. There has already been some success in situations where single genes play a large role in the overall drug response, and this is discussed with reference to commonly used cytotoxics and anti-retrovirals, encompassing the major principles of pharmacogenetics.