Credit for the development of laser theory is generally given to Albert Einstein. In his theory "Zur Quantum Theories der Strahlung", published in 1916, he first used the name Stimulated Emission.
The effects of red light on cellular function have been known since 1880 however the clinical benefits were only discovered by accident during laser safety tests in 1967. In 1967, a few years after the first working laser was invented, Endre Mester in Semmelweis University Budapest, Hungary, wanted to find out if laser light could cause cancer. He took some mice, shaved the hair off their backs, divided them into two groups and gave a laser treatment with a low-powered ruby laser to one group.
They did not get cancer and to his surprise the shaved hair grew back more quickly on the treated group than the untreated group. That was how "laser bio-stimulation" was discovered.
The first low-power lasers suitable for treating pain became available commercially in the late 1970's. Ever since then, laser therapy has been widely utilized in Europe by physical therapists, nurses and doctors. Now, after FDA approval in 2001, laser therapy is quickly gaining popularity in the USA.
Yes. There are thousands of published studies demonstrating the clinical effectiveness of laser therapy. Among these, there are more than one hundred rigorously controlled, scientific studies that document the effectiveness of laser for many clinical conditions.