In the search for novel treatments for various diseases, the nexus of biophysics and drug discovery represents a dynamic and transformational paradigm. A new age in pharmaceutical research has begun thanks to biophysics and its thorough grasp of the structural and physical characteristics of biological molecules. This study explores how advances in biophysical approaches, including allosteric modulation, intrinsically disordered proteins (IDPs), and protein phase transitions, have transformed the drug development process. Protein phase transitions, supported by the biophysical principles, have provided crucial insights into disorders like ALS and Alzheimer’s, opening up new avenues for therapeutic intervention. Targeting IDPs and their role in liquid–liquid phase separation has produced creative approaches to diseases that were formerly thought to be resistant to therapy. In order to reduce the complexity of complicated diseases, the concept of allosteric modulation, made possible by biophysical understanding, offers a precise and selective approach to medication creation. This review highlights the significant influence of biophysics on the development of therapeutics and the discovery of new drugs. Biophysics is advancing the discipline toward the creation of more precise, efficient, and tailored medications by illuminating the biophysical properties of proteins, the complexities of phase transitions, and the dynamics of drug interactions. Biophysical insights are poised to alter healthcare by bringing together several fields and sustained innovation, giving people dealing with a variety of ailments fresh hope.