The attrition rates of new chemical entities (NCEs) in preclinical and clinical development are staggeringly high. NCEs are abandoned due to insufficient efficacy, safety issues, and economic reasons. Uncovering drug defects that produce these failures as early as possible in drug discovery would be highly effective in lowing the cost and time of developing therapeutically useful drugs. Unfortunately, there is no single factor that can account for these NCE failures in preclinical and clinical development since factors, such as solubility, pKa, absorption, metabolism, formulation, pharmacokinetics, toxicity and efficacy, to name a few, are all interrelated. In addition, there are many problems in scaling-up drug candidates from the laboratory bench scale to the pilot plant scale. To address the problem of attrition rates of NCEs in preclinical and clinical development and drug scale-up issues, pharmaceutical companies need to reorganize their preclinical departments from a traditional linear approach to a parallel approach. In this review, a strategy is put forth to integrate certain aspects of drug metabolism/pharmacokinetics, toxicology functions and process chemistry into drug discovery. Compound optimization in early and late phase drug discovery occurs by relating factors such as physicochemical properties, in vitro absorption, in vitro metabolism, in vivo pharmacokinetics and drug scale-up issues to efficacy optimization. This pre-preclinical paradigm will improve the success rate of drug candidates entering development.