Background: Alzheimer's disease is the most expensive disease for healthcare providers in developed countries in the 21st century, and the most lucrative market for the pharmaceutical industry. Changes in the activity of the membrane embedded protease γ-secretase can result in a decreased clearance of amyloid proteins and the development of Alzheimer's disease. We analyzed the catalytic mechanism of γ-secretase using some of the best known drug candidates; semagacestat, DAPT, avagacestat, and LY411-575. Molecular docking studies were first used for the identification of binding sites, and multi-scale molecular dynamic simulations were used for the description of binding interactions. Results: Molecular dynamics studies show that the proteolytic channel of γ-secretase, as well as surface enzyme binding sites, can bind several drug candidates at the same time. There are three surface binding sites that bind ligands over a time period of 300 nanoseconds. At least two ligands can bind inside the open active site tunnel when there is no substrate present. Each step in substrate catalysis has a different affinity for different drug candidates. Transient interactions between positive and negative amino acids in the active site can regulate the catalytic cleavages of amyloid beta precursor protein. Conclusion: Multiple biphasic modulators can bind to γ-secretase simultaneously and modulate its Aβ production. The biphasic modulators that activate γ-secretase and act as competitive inhibitors could be the most promising drug for Alzheimer's disease. Molecular dynamics can be used to design and develop such drug candidates.