Outrage of the Month: Betting on Clinical Trial Results and FDA Decisions
Health Letter, November 2026
By Robert Steinbrook, M.D.
Director, Public Citizen's Health Research Group
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Prediction markets allow people to place bets on the outcomes of various events. Kalshi, a New York-based prediction-market platform, is used primarily for sports betting, such as bets on who will win the Super Bowl or the World Series. In 2025, sports betting accounted for more than 90% of Kalshi’s site activity and 89% of its revenue. Bets can also be placed on unusual topics, such as “Will the U.S. confirm that aliens exist?”
In July 2026 Kalshi announced a pilot program to allow bets, known as event contracts, on the results of clinical trials and Food and Drug Administration (FDA) regulatory decisions. A contract typically pays $1 if an event happens and $0 if it does not. In October 2026, bets could be placed on whether certain late-stage clinical trials will meet their primary endpoint; when the FDA will approve retatrutide, an investigational drug for obesity and type 2 diabetes; and “will the FDA approve any psychedelic substance for medical use this year?”
In addition to generating revenue, Kalshi’s stated rationales are to “create publicly available, accurate probabilities” that inform drug development and to “give investors something they have never had: a way to act on a view about a single drug.” Owning stock is an investment in a company as a whole; prediction-market betting is a bet on an individual drug or a company-sponsored clinical trial.
Despite safeguards against insider trading and limiting listings to late-stage trials after enrollment closes, gambling on the side about clinical trial results and FDA decisions is weird and threatens the scientific integrity of trials. Prediction-market betting reflects a fundamental misunderstanding of the purpose of clinical research: people, often people with serious diseases, volunteering their time and looking for hope and new treatments. Clinical research is based on public trust and should advance medical knowledge and public health. Clinical research is not about providing information to investors and financial markets.
The risks of drug-development prediction markets include leaks of nonpublic information, insider trading and spillover effects on trial enrollment. The only people who should really know what is going on are insiders with nonpublic information, such as the drug sponsors, investigators at trial sites, participants and FDA officials. These insiders, who shouldn’t be betting at all, are in the best position to profit.
In a properly conducted randomized clinical trial of a new drug, no one other than members of the data safety monitoring board should have advance knowledge of the likely outcome. If the pattern of prediction-market betting is interpreted as showing a clinical trial is unlikely to succeed, potential participants may be misled and less likely to enroll.
In the United States, prediction markets are overseen by the Commodity Futures Trading Commission (CFTC), a little-known financial regulatory agency. Although bets on clinical trial results and drug approvals are legal, they shouldn’t be. The CFTC should prohibit these bets or, at a minimum, develop a strong regulatory framework that forbids betting by anyone with nonpublic information.