Despite the marked advances in drug therapy, some patients do not respond favorably or suffer severe adverse drug effects. Pharmacogenetic studies have shown that polymorphisms of drug metabolizing enzymes, transporters and receptors contribute to variable drug response. Owing to the complexity of drug actions, a broader genomics approach aims at finding new drug targets and optimizing therapy for the individual patient. However, pharmacogenomics has made only a few inroads into clinical practice to date. This review evaluates obstacles that need to be overcome. These include the complexity of mechanisms underlying drug response, given singly or in combination, uncertainty about the genetic underpinnings of complex diseases, such as cancer, diabetes, cardiovascular and mental disorders and a lack of quantitative understanding of the scope of genetic variations, even for well-studied genes. By resolving these hurdles, pharmacogenomics will yield significant, but incremental, therapeutic advances paving the way towards personalized health care.