Large-scale cancer cell line screens have identified thousands of protein-coding genes (PCGs) as biomarkers of anticancer drug response. However, systematic evaluation of long non-coding RNAs (lncRNAs) as pharmacogenomic biomarkers has so far proven challenging. Here, we study the contribution of lncRNAs as drug response predictors beyond spurious associations driven by correlations with proximal PCGs, tissue-lineage or established biomarkers. We show that, as a whole, the lncRNA transcriptome is equally potent as the PCG transcriptome at predicting response to hundreds of anticancer drugs. Analysis of individual lncRNAs transcripts associated with drug response reveals nearly half of the significant associations are in fact attributable to proximal cis-PCGs. However, adjusting for effects of cis-PCGs revealed significant lncRNAs that augment drug response predictions for most drugs, including those with well-established clinical biomarkers. In addition, we identify lncRNA-specific somatic alterations associated with drug response by adopting a statistical approach to determine lncRNAs carrying somatic mutations that undergo positive selection in cancer cells. Lastly, we experimentally demonstrate that two novel lncRNA, EGFR-AS1 and MIR205HG, are functionally relevant predictors of anti-EGFR drug response.3