The focus on drug delivery for the pediatric population has been steadily increasing in the last decades. In terms of developing in vitro models simulating characteristics of the targeted pediatric population, with the purpose of predicting drug product performance after oral administration, it is important to simulate the gastro-intestinal conditions and processes the drug will encounter upon oral administration. When a drug is administered in the fed state, which is commonly the case for neonates, as they are typically fed every 3 h, the digestion of the milk will affect the composition of the fluid available for drug dissolution/solubilization. Therefore, in order to predict the solubilized amount of drug available for absorption, an in vitro model simulating digestion in the gastro-intestinal tract should be utilized. In order to simulate the digestion process and the drug solubilization taking place in vivo, the following aspects should be considered; physiologically relevant media, media volume, use of physiological enzymes in proper amounts, as well as correct pH and addition of relevant co-factors, e.g., bile salts and co-enzymes. Furthermore, physiological transit times and appropriate mixing should be considered and mimicked as close as possible. This paper presents a literature review on physiological factors relevant for digestion and drug solubilization in neonates. Based on the available literature data, a novel in vitro digestion model simulating digestion and drug solubilization in the neonate and young infant pediatric population (2 months old and younger) was designed.