Prediction markets enter pharmaceutical drug trials, raising integrity concerns

Prediction market platforms such as Kalshi and Polymarket are expanding beyond financial and political wagering into pharmaceutical drug trials, listing contracts on late-stage clinical trial endpoints like Alzheimer's drug trials. Health policy experts, including Brown University's Matthew Vogel, warn in The New England Journal of Medicine that betting on clinical trials risks undermining trial integrity, altering patient participation, and introducing manipulation incentives, prompting calls for regulatory oversight by the FDA and CFTC.

Prediction markets in pharmaceutical trials

• ▪Kalshi is considering expanding its drug trial contracts from late-stage endpoints to earlier-phase trials and metrics such as the number of reported adverse events.
• ▪Prediction market platforms like Kalshi and Polymarket are offering contracts on pharmaceutical drug development outcomes, including whether trials like the phase 3 POLARIS-AD trial of experimental Alzheimer's drug AR1001 will meet primary endpoints.
• ▪Prediction marketplaces experienced rapid growth, generating $50 billion in overall trading volume in 2025 according to a perspective written by Brown University health policy professor Matthew Vogel and colleagues.

Clinical trial integrity concerns

• ▪Health policy experts warn that prediction market odds on clinical trials could undermine trial validity, compromise perceived equipoise, and alter participant behavior regarding enrollment, dropouts, or crossovers.
• ▪Health policy experts cautioned against allowing prediction contracts on metrics like reports to the FDA's Adverse Event Monitoring System because public submission systems are vulnerable to manipulation.
• ▪Matthew Vogel and colleagues recommended in The New England Journal of Medicine that regulators like the CFTC and FDA review individual clinical trial contracts, restrict betting on small trials, and block individuals with nonpublic information from trading.

Prediction market calibration accuracy

• ▪Polymarket stated that its political prediction markets demonstrated a 98% accuracy rate one day prior to elections.
• ▪Prediction markets are well calibrated overall, but exhibit a favorite-longshot bias by underestimating win rates for high-probability bets and overestimating win rates for low-probability bets.

Election betting market growth

• ▪Data from Polymarket shows that the top 1% of trading wallets accounted for 70% of all congressional betting volume during the 2026 US midterm election cycle through September 30, 2026.
• ▪Betting on US midterm elections reached over $220 million across Polymarket and Kalshi through September 30, 2026, up from $92 million for the entire 2024 congressional election cycle.
• ▪In the 2026 US congressional midterm cycle, 58% of election prediction markets focused on victory margins and only 16% focused on race winners, whereas 71% focused on winners in 2024.

Insider trading risks

• ▪Kalshi has suspended candidate accounts for betting on their own elections and prohibits election trading by politicians and campaign workers.
• ▪Policymakers and advocacy groups express concern that election betting could undermine trust in democratic processes and open new avenues for insider trading.

Market manipulation concerns

• ▪Academic research into prediction markets indicates that speculative manipulation attacks initially alter contract prices, but those price distortions are quickly undone by market participants.
• ▪Matthew Vogel warned that bad information or illiquid markets on pharmaceutical outcomes could cause public prices to mislead patients who are evaluating whether to join clinical trials.