Background: Health care systems generate vast amounts of unstructured text, such as clinical notes, which capture nuanced patient experiences, clinical reasoning, and subtle indicators of health status. While health system research has traditionally relied upon structured data, natural language processing (NLP) enables the extraction of this rich textual information. Leveraging NLP could improve the identification and characterization of underreported adverse drug events (ADEs). Objective: The primary objective of this study was to train and evaluate multiple NLP models, including both previously published architectures and a novel model, for the identification of ADEs from clinical notes. Methods: Electronic medical records from the Manitoba Primary Care Research Network (MaPCReN) were used in this study. Clinical notes were annotated to indicate the presence of a possible ADE, the associated words or phrases, and the corresponding drug. A subselection algorithm was applied to ensure sufficient representation of notes containing ADEs for training a robust classifier. The cohort was restricted to patients aged 55 years and older and was annotated in 2 waves: Wave 1 comprised primary care encounter notes selected for a temporally linked emergency department (ED) visit, enriching it for acute presentations, while Wave 2 relaxed this requirement, and its acuity composition was uncharacterized. The annotated data were split into training and test sets. NLP models-including BioBERT, BlueBERT, a large language model (LLM) classifier, and an LLM embeddings-based classifier-were trained on both original clinical notes and notes reformatted into Subjective-Objective-Assessment-Plan (SOAP) structure. To approximate a clinician-inspired reasoning workflow, Mistral-7b-Instruct was used to extract presenting symptoms and generate a ranked list of potential etiologies. Model performance was evaluated using precision, recall, and F1-score. Results: Of the 1085 annotated encounter notes, 355 included ADEs. Across 9 modeling approaches evaluated over 5 random seeds, models trained on SOAP-rewritten notes generally outperformed those trained on original notes. The SOAP Rewrite+ LLM Embeddings Classifier (GritLM-SOAP) achieved the highest mean F1-score (72.53%; 95% CI 62.40%-81.82%), while BioBERT-SOAP weighted achieved the highest mean recall (76.34%; 95% CI 62.69%-89.66%). End-to-end span-level extraction (named entity recognition+relation extraction) on ADE-positive test notes achieved a mean relaxed F1-score of 0.455, with relation extraction identified as the bottleneck. Conclusions: Effective detection of ADEs in clinical notes may benefit from NLP models that approximate the clinical reasoning of health care providers. While the SOAP Rewrite+ LLM Embeddings Classifier demonstrated a reasonable balance of precision and recall, there is room for improvement as models evolve.