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For hundreds of years, the drug discovery and development industry has aimed at identifying single components with a clear mechanism of action as desirable candidates for potential drugs. However, this conventional strategy of drug discovery and development has faced challenges including a low success rate and high development costs. Herein, we critically review state-of-the-art drug discovery and development based on multi-component Chinese medicine formulas. We review the policies and application status of new drugs based on multi-component Chinese medicines in the US, China, and the European Union. Moreover, we illustrate several excellent cases of ongoing applications. Biomedical technologies that may facilitate drug discovery and development based on multi-component Chinese medicine formulas are discussed, including network pharmacology, integrative omics, CRISPR gene editing, and chemometrics. Finally, we discuss potential problems and solutions in pre-clinical and clinical research in drug discovery and development based on multi-component Chinese medicine formulas. We hope that this review will promote discussion of the roles of multi-component Chinese medicine formulas in the discovery and development of new drugs for the treatment of human diseases.