The growing interest in incorporating pharmacogenetics (PGx) into drug development and clinical practice raises several questions: which study designs best reveal relevant pharmacogenetic biomarkers, best clarify specific hypotheses in PGx, and result in the largest gain of clinical evidence in this field? In this review, we present and compare a variety of PGx-related study designs. The type and quality of evidence gained by each category of study design is evaluated, and an appropriate timeline for the integration of pharmacogenetic studies into drug development is proposed. A summary of the pros and cons of the different study designs might help investigators decide how best to incorporate PGx into drug research. Using different scenarios to explain how genetic polymorphisms influence drug action, we illustrate how this knowledge can be translated into individualized drug choices, individualized dosage determination based on pharmacogenetic diagnostics, and other types of monitoring in order to make drug therapies safer and more effective.