Prediction market platforms Kalshi and Polymarket have recently expanded their offerings to include wagers on the outcomes of clinical trials and Food and Drug Administration drug approval decisions. The platforms process billions of dollars in weekly trading across various categories, from entertainment to geopolitical events. The companies argue that allowing such bets provides valuable aggregated information about drug development prospects and can help investors identify promising treatments deserving of funding.
Researchers and medical professionals have raised significant concerns about the practice. David Tsai, who oversees clinical trials at a San Francisco Bay Area biotech company, launched an online petition opposing such betting and contends it undermines trust and integrity in biotechnology. Trial staff members with financial stakes in particular outcomes could theoretically manipulate variables such as dosing or drug temperature to influence results. Nicholas Zaorsky, a professor of radiation oncology at Mayo Clinic in Jacksonville, noted that clinical trials differ fundamentally from other contexts where prediction markets might be beneficial, since investigators and coordinators can directly influence the outcomes being wagered on.
Kalshi representatives counter that betting on clinical trial outcomes is no different from short selling in stock markets, where financial incentives to profit from trial failures are substantially larger. The company also distinguishes itself from stock markets by claiming to provide useful information to researchers. Kalshi has secured support from prominent figures including Anne Wojcicki, founder of genetic testing company 23andMe, who argue that transparent trial probability data could help patients understand available options and advance medical breakthroughs.
The platforms have implemented safeguards designed to detect insider trading, including employment verification and surveillance tools for unusual market activity. Kalshi currently restricts betting to late-stage trials where participants are already enrolled and prohibits wagers on trials involving only minor participants, though these policies may change. Critics remain skeptical about whether such measures can effectively monitor all individuals involved in trials. Patient advocates worry that betting creates perverse incentives and distances speculators from the human stakes involved in clinical research.
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