The immense amount of electronic health data (pharmacy and administrative claims, electronic health records, and clinical registries) that is being generated every day in the care of patients has the potential to be leveraged for improving clinical decisions at the point of care, uncovering or validating drug efficacy and drug safety. The potential use of big data for improving safe and effective use of medications is especially important in children because of their low drug exposure relative to adults. Electronic health data is collected primarily for clinical or billing purposes and not for research purposes. The major steps involved in data acquisition, extraction, aggregation, analysis, modeling, and interpretation are discussed. It is important to understand the limitation of big data and utilize appropriate study design and statistical methods. Possible applications are presented along with specific examples of how big data has been used in drug research to find that blip on the radar screen that may give an efficacy or safety signal that can lead to further investigation.