Stem Cells Are ‘Drugs’ Under Law, Not Medical Procedures”: Supreme Court Brings Stem Cell Therapy Back Under Drugs Act

“It is a settled position of law that executive orders... cannot operate in contravention to statutory rules with the effect of supplanting the statutory mandate.” — In a seminal ruling Supreme Court of India, comprising Justice J.B. Pardiwala and Justice R. Mahadevan, has struck down the Department of Health Research (DHR) Order dated 03.03.2024, asserting that executive instructions cannot create a regulatory vacuum for stem cell research.

Stem Cells Are ‘Drugs’ Under the 1940 Act

The Supreme Court has settled a long-standing debate regarding the classification of stem cells. The Respondents argued that autologous stem cells (cells taken from a patient and re-injected into the same patient) are "procedures" and not "drugs." The Court rejected this, interpreting Section 3(b)(i) of the Drugs and Cosmetics Act, 1940.

The Bench held that the definition of "drug" includes "all substances intended to be used for... treatment." Relying on Chimanlal Jagjivan Das Sheth and Ishwar Singh Bindra, the Court ruled that stem cells are "corporeal matter" and "substances" intended for treatment. Therefore, even if they are not "new drugs" under the New Drugs and Clinical Trial (NDCT) Rules, 2019 (because they are minimally manipulated), they remain "drugs" under the parent Act and are subject to statutory regulation.

“Though such therapies may not be ‘new drugs’, yet their novel and evolving nature remains undisputed... the therapeutic use of stem cells for treatment of ASD cannot be recognized as ‘a sound and relevant medical practice’ unless there is scientific material on record.”

ICMR Guidelines Are Mandatory, Not Advisory

The judgment elevates the legal status of the National Guidelines for Stem Cell Research (NGSCR) 2017 and the National Ethical Guidelines. The Court held that under the NDCT Rules, 2019 and Regulation 7.22 of the IMC Regulations, 2002, adherence to these guidelines is a statutory mandate.

The Court clarified the regulatory pathway:

1. Stem-Cell Derived Products (Substantial Manipulation): Regulated as "New Drugs" requiring CDSCO approval and strict clinical trials under NDCT Rules.

2. Minimally Manipulated Stem Cells: Regulated as "Biomedical and Health Research" under Chapter IV of NDCT Rules, requiring Ethics Committee (EC) approval and strict adherence to ICMR guidelines.

Striking Down Executive Overreach

A critical constitutional aspect of the judgment was the striking down of Clause 2(vi) of the DHR Order dated 03.03.2024. This executive order had dissolved the National Apex Committee for Stem Cell Research and Therapy (NAC-SCRT) and stated that the DHR would have "no regulatory role" in stem cell research.

The Supreme Court termed this abdication of duty "non est" (non-existent in law). The Court held that Rules 17 and 18 of the NDCT Rules, 2019 explicitly empower the DHR to oversee Ethics Committees. An executive order cannot override these statutory rules to create a "regulatory vacuum." The Court directed the Union to re-constitute the NAC-SCRT or a dedicated authority to ensure coherent monitoring, emphasizing that the lack of regulation allows commercial exploitation of patients.

“The obscurity in the legal regime also enables manipulation of patients’ vulnerabilities by errant medical practitioners. Such obscurity, whether conscious or unintended, has arisen directly from legislative shortsightedness.”

Commercial Banking Prohibited

The Court also clarified that commercial banking of biological materials (other than Umbilical Cord Blood) is currently prohibited under the NGSCR 2017. Entities processing stem cells, even for end-use by doctors, are engaged in "manufacture" under Section 3(f) of the Drugs Act and must obtain necessary licenses. The argument that processing labs are mere vendors not bound by medical regulations was summarily rejected.

Date of Decision: 30th January, 2026