Arnold Schwarzenegger only agreed to star in this picture after much haggling in exchange of dissolving the multi-picture agreement with Dino De Laurentiis. He had one picture left with the producer and was actually much interested in doing Total Recall (1990), but De Laurentiis objected, feeling that he was not suitable for the lead role of Quaid. Instead, Patrick Swayze was already cast before the bankruptcy.
According to Arnold Schwarzenegger, Dino De Laurentiis decided to produce this film because he needed quick cash for his long gestating project Total Recall (1990). At that time, he owned the rights to the film. Despite that, the failure of the film to make adequate money (only $16 million) would eventually result in De Laurentiis' bankruptcy and Recall's sale of rights to Carolco.
In an interview to promote the film, Arnold Schwarzenegger said this was the first film where he got to wear an elaborate and modern wardrobe. He said that before this, his wardrobe budget for a film was about "10 dollars".
During production and filming the movie was to be called "Triple Identity" - a reference to the fact that the Schwarzenegger character goes from being an FBI Agent (1), to a local cop (2) and then to undercover operative (3). Several scripts exist for the film with the title on the front page. "Raw Deal" was chosen to make the film sound more like a regular action movie.