Over the past few years, the utilization of several biopolymers of natural, synthetic or microbial origin has witnessed a peak in various medical and pharmaceutical applications, like drug delivery, drug formulation, tissue engineering scaffolds, medical implants (e.g., prosthetics, stents), wound healing and dressing materials, and biosensing. This is mainly attributed to their ease of processing, biodegradability, high bioactivity, and biocompatibility compared to synthetic polymers. Moreover, a surge in the development of bio-/nanocomposites has emerged, with an aim to enhance the inherent properties of raw biopolymers derived from natural/microbial sources. This review is mainly focused on the different types of biopolymers or their composites utilized in medicinal or pharmaceutical industries and sheds light on the key advantages and limitations associated with their synthesis or use. Furthermore, the article presents a list of commercialized biopolymer composites with a discussion on the future scope of using these “gifts of nature” in the medical field.