Hydrogels derived from both natural and synthetic polymers have gained significant scientific attention in recent years for their potential use as biomedical materials to treat human diseases. While a great deal of research efforts have been directed towards investigating polymeric hydrogels as matrices for drug delivery systems, examples of such hydrogels exhibiting intrinsic therapeutic properties are relatively less common. Characteristics of synthetic and natural polymers such as high molecular weight, diverse molecular architecture, chemical compositions, and modulated molecular weight distribution are unique to polymers. These characteristics of polymers can be utilized to discover a new generation of drugs and medical devices. For example, polymeric hydrogels can be restricted to the gastrointestinal tract, where they can selectively recognize, bind, and remove the targeted disease-causing substances from the body without causing any systemic toxicity that are associated with traditional small molecule drugs. Similarly hydrogels can be implanted at specific locations (such as knee and abdomen) to impart localized therapeutic benefits. The present article provides an overview of certain recent developments in the design and synthesis of functional hydrogels that have led to several polymer derived drugs and biomedical devices. Some of these examples include FDA-approved marketed products.