Many cancer treatments benefit only a minority of patients who receive them. This results in an enormous burden on patients and on the health care system. The problem will become even greater with the increasing use of molecularly targeted agents whose benefits are likely to be more selective unless the drug development process is modified to include co-development of companion diagnostics. Whole genome biotechnology and decreasing costs of genome sequencing make it increasingly possible to achieve an era of predictive medicine in oncology therapeutics. The challenges are numerous and substantial but are not primarily technological. They involve organizing publicly funded diagnostics of deregulated pathways, adopting new paradigms for drug development, and developing incentives for industry to incur the complexity and expense of co-development of drugs and companion diagnostics. This article reviews some designs for phase III clinical trials that may facilitate movement to a more predictive oncology.