This paper discusses the hazards of regulating controversial biomedical research in light of the emergence of powerful, multi-national biotechnology corporations. Prohibitions on the use of government funds can simply force controversial research into the private sphere, and unilateral or multilateral research bans can simply encourage multi-national companies to conduct research in countries that lack restrictive laws. Thus, a net effect of government regulation is that research migrates from the public to the private sphere. Because private research receives less oversight and external scrutiny than public research, it can threaten the welfare and rights of human subjects, scientific progress and openness, and the quality of the approval process for new biomedical technologies. In order to avoid the harmful effects of government regulation of biotechnology, society should promote meaningful discussion and dialogue among scientists, industry leaders, and the public before resorting to regulatory solutions. Legislative or executive initiatives should be applied with great discretion and care, and should be crafted in such a way that they protect public health and safety, promote scientific progress, and avoid the hazards of privatized research and polarized debates.