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In the modern era of cancer treatment, with targeted agents superseding more traditional cytotoxic chemotherapeutics, it is becoming increasingly important to use stratified medicine approaches to ensure that patients receive the most appropriate drugs and treatment schedules. In this context, there is significant potential for the use of pharmacodynamic biomarkers to provide pharmacological information, which could be used in a therapeutic drug monitoring setting. This review focuses on discussing some of the challenges faced to date in translating preclinical pharmacodynamic biomarker approaches to a clinical setting. Recent advances in important areas including circulating biomarkers and pharmacokinetic/pharmacodynamic modeling approaches are discussed, and selected examples of anticancer drugs where there is existing evidence to potentially advance pharmacodynamic therapeutic drug monitoring approaches to deliver more effective treatment are discussed. Although we may not yet be in a position to systematically implement therapeutic drug monitoring approaches based on pharmacodynamic information in a cancer patient setting, such approaches are likely to become more commonplace in the coming years. Based on ever-increasing levels of pharmacodynamic information being generated on newer anticancer drugs, facilitated by increasingly advanced and accessible experimental approaches available to researchers to collect these data, we can now look forward optimistically to significant advances being made in this area.