Molecular dynamics (MD) simulations have become increasingly useful in the modern drug development process. In this review, we give a broad overview of the current application possibilities of MD in drug discovery and pharmaceutical development. Starting from the target validation step of the drug development process, we give several examples of how MD studies can give important insights into the dynamics and function of identified drug targets such as sirtuins, RAS proteins, or intrinsically disordered proteins. The role of MD in antibody design is also reviewed. In the lead discovery and lead optimization phases, MD facilitates the evaluation of the binding energetics and kinetics of the ligand-receptor interactions, therefore guiding the choice of the best candidate molecules for further development. The importance of considering the biological lipid bilayer environment in the MD simulations of membrane proteins is also discussed, using G-protein coupled receptors and ion channels as well as the drug-metabolizing cytochrome P450 enzymes as relevant examples. Lastly, we discuss the emerging role of MD simulations in facilitating the pharmaceutical formulation development of drugs and candidate drugs. Specifically, we look at how MD can be used in studying the crystalline and amorphous solids, the stability of amorphous drug or drug-polymer formulations, and drug solubility. Moreover, since nanoparticle drug formulations are of great interest in the field of drug delivery research, different applications of nano-particle simulations are also briefly summarized using multiple recent studies as examples. In the future, the role of MD simulations in facilitating the drug development process is likely to grow substantially with the increasing computer power and advancements in the development of force fields and enhanced MD methodologies.