Modeling tools aim to predict potential drug side effects, although they suffer from imperfect performance. Specifically, protein-protein interaction models predict drug effects from proteins surrounding drug targets, but they tend to overpredict drug phenotypes and require well-defined pathway phenotypes. In this study, we used PathFX, a protein-protein interaction tool, to predict side effects for active ingredient-side effect pairs extracted from drug labels. We observed limited performance and defined new pathway phenotypes using pathway engineering strategies. We defined new pathway phenotypes using a network-based and gene expression-based approach. Overall, we discovered a trade-off between sensitivity and specificity values and demonstrated a way to limit overprediction for side effects with sufficient true positive examples. We compared our predictions to animal models and demonstrated similar performance metrics, suggesting that protein-protein interaction models do not need perfect evaluation metrics to be useful. Pathway engineering, through the inclusion of true positive examples and omics measurements, emerges as a promising approach to enhance the utility of protein interaction network models for drug effect prediction.