The common and persistent failures to translate promising preclinical drug candidates into clinical success highlight the limited effectiveness of disease models currently used in drug discovery. An apparent reluctance to explore and adopt alternative cell-and tissue-based model systems, coupled with a detachment from clinical practice during assay validation, contributes to ineffective translational research. To help address these issues and stimulate debate, here we propose a set of principles to facilitate the definition and development of disease-relevant assays, and we discuss new opportunities for exploiting the latest advances in cell-based assay technologies in drug discovery, including induced pluripotent stem cells, three-dimensional (3D) co-culture and organ-on-a-chip systems, complemented by advances in single-cell imaging and gene editing technologies. Funding to support precompetitive, multidisciplinary collaborations to develop novel preclinical models and cell-based screening technologies could have a key role in improving their clinical relevance, and ultimately increase clinical success rates.