Dry eye disease (DED) is one of the most common ocular surface disorders characterised by a deficiency in quality and/or quantity of the tear fluid. Due to its multifactorial nature involving several inter-related underlying pathologies, it can rapidly accelerate to become a chronic refractory condition. Therefore, several therapeutic interventions are often simultaneously recommended to manage DED efficiently. Typically, artificial tear supplements are the first line of treatment, followed by topical application of medicated eyedrops. However, the bioavailability of topical eyedrops is generally low as the well-developed protective mechanisms of the eye ensure their rapid clearance from the precorneal space, thus limiting ocular penetration of the incorporated drug. Moreover, excipients commonly used in eyedrops can potentially exhibit ocular toxicity and further exacerbate the signs and symptoms of DED. Therefore, formulation development of topical eyedrops is rather challenging. This review highlights the challenges typically faced in eyedrop development, in particular, those intended for the management of DED. Firstly, various artificial tear supplements currently on the market, their mechanisms of action, as well as their application, are discussed. Furthermore, formulation strategies generally used to enhance ocular drug delivery, their advantages and limitations, as well as their application in commercially available DED eyedrops are described.