Hi! One ethical issue is the fact that animals have no consent to their testing, and they are living beings. Many people think that there are alternatives to using warm, live bodies for research and testing, and that animals do not need unneccesary pain for for our behalf.
One moral issue has to do with religion and the manner in which science would have its way with living beings trying to "play God" and maybe even hurting animals. In general, animal testing is supposedly pain-free and reportedly done within ethical limites, but nobody really knows what really goes on, hence, it becomes an issue.
The major moral and ethical issue here hinges on how much we should subject animals to pain in order to gain benefits for human beings.
Presumably, most animal testing (that we care much about) hurts the animals to some degree. At the same time, all of the animal testing helps human beings in some way by finding out if various products are safe for human use.
The issue is simply this: how important are the rights of animals, if any? When are they outweighed by the possibility that humans will benefit from the testing?
In addition to the many good answers that already have been given and probably will be given, I will offer something a little offbeat, but something you may not have considered. From the moral viewpoint of Christianity, according to the Bible, after the flood, God gave man dominion over the animals. So, in spite of what groups like PETA and other animal rights groups say, man is created in God's image and so therefore, when it comes down to choosing the "animal or the man", the man must come over the animal. Man is a steward of the earth, however, in this world view, so he is also responsible for treating all creatures with respect and not with cruelty. However, if an animal can provide an answer to help man, that would trump the animal's rights, as long as it could be done humanely.
That said.........do you remember the novel/movie Jurassic Park, where even though all the dinosaurs are female, yet they find a way to reproduce? And Dr. Malcolm says, "Nature finds a way?" Well, this reminds me of a story. A friend of mine was working in a lab as a researcher, conducting experiments on monkeys. One day, one of the monkeys attacked him and scratched his face so badly that it scared my friend right into medical school (he is now a doctor). Nature finds a way and sometimes nature finds a way to tell us to "back off!"
The basic moral and ethical issues involved in animal testing in medical and other research is the question of basic respect for any form of life. This issue gets confused because one type of animal killing other types for food is a basic part of the nature and its existence.
However, disrespect for any form of life, and particularly unnecessary and excessive cruelly towards one form of life tends to develop insensitivity toward other forms of lives also including life of human beings.
So the animal testing practices have to begin with must have suitable restraints to eliminate avoidable pain and cruelty towards the animals subject to such testing. Then the need for for the animal testing must be justified in terms to contribution it makes to the success of research, and must be compared with alternate methods of achieving the same results. Finally the need for the research it self must be justified. If research in a particular field cannot be completed without animal testing then the need for the research mus be justified in terms of he cost to humanity in terms of cost fostering insensitivity towards life and cruelty.