Stem cell technology holds the promise of radically changing medicine through the provision of better disease models; the creation of tissue, cells, and organs for therapeutic uses; and the increased personalisation of healthcare. However, the degree to which any of these developments can be realised in the USA rests upon how effective the regulatory environment is in nurturing the technology to market. This article assesses the regulation in terms of its ability to minimise factors which erode the public interest in developing medical innovations (abuse) and promoting them to the market. This requires an overarching review of patent law (and how it fits with anti-trust and contract law); as well as the general regulation of innovation through ethical review, clinical trials, market authorisation, post-market oversight; government lead regulation of stem cells; and finally incorporating the impact of self-regulation by industry. From this assessment, it becomes possible to appreciate that the optimal system of regulation is reliant upon the gentle tweaking of many factors, rather than the wholesale revision of only a few. It also becomes possible to identify that individual tools of regulation have varying impacts. For example, the patent system may be the most open to abuse by individual companies, but as a regulatory framework it has the most mechanisms for dealing with such abuses. However, the biggest impact upon curtailing abuse derives from the self-regulation of the industry. Conversely, government led regulation is open to abuse from political agendas, but it has the greatest capacity to nurture innovation productively.