Yes, you can only tell from the context.

"A drug is anything, other than food, intended to affect the structure or any function of the body of humans or other animals." Some drugs can be dangerous if taken improperly, and so these drugs are regulated by governments. If one acquires these regulated drugs without following the regulation (law) then they are called "illegal drugs."

We say drug companies to mean pharmaceutical companies in the UK too. Drug companies is more informal.

Thank you, Julia.Yes, this makes it a little bit easier. Are "drug companies" for pharmaceutical companies also only used in American English?

Context and co-text is important with this word. Obviously if used with 'addiction' for example, the meaning is obvious. A point to note is that 'drug' used in the medicinal context is more common in American English. In British English we use words such as medication, medicine, tablets, pills etc. Hope that helps.