This article reviews the process by which new drugs are introduced into anaesthetic practice with particular emphasis on pharmaceutical development and government regulation. After a brief overview of the drug development process, new trends in drug development are discussed including implementation of pharmacokinetic, pharmacodynamic and toxicokinetic studies in both preclinical and human phases of drug evaluation. A synopsis of the drug regulatory process is provided and, in particular, the problem of unapproved drug use in anaesthesia is discussed. Ethical issues regarding physician-industry interactions are highlighted by examples of conflict of interest in anaesthesia. The processes of drug development and regulation require much effort and cooperation between clinicians, pharmaceutical manufacturers and government regulators to achieve a common goal; the development and utilization of safe and effective drugs. A fundamental understanding of these processes may further facilitate optimal drug utilization and the active involvement of anaesthetists in the drug development process.