Two senators are right to ask HHS about bets on clinical trials and FDA approvals
Their letter covers Kalshi contracts in the United States and Polymarket contracts on an international exchange. Kalshi said it limited the markets when it launched them in July.
By Connor O'Brien ·
Why it matters: A contract on a trial or an FDA decision is a more direct wager than a share of a company waiting on an approval.
For information only, not investment advice.
Sens. Angela Alsobrooks, D-Md., and Ron Wyden, D-Ore., asked HHS Secretary Robert F. Kennedy Jr. on Wednesday what the department has done about prediction-market contracts on clinical trials and FDA approvals, in a letter CNBC obtained first.1 Kalshi offers those contracts in the United States; Polymarket offers them only on its international exchange, which is not regulated in the U.S.1 The senators are right to treat that as more than just another event bet.
“Allowing individuals to bet on the success of these trials and drugs undermines the scientific process, creates perverse incentives for researchers, harms trial participants, and could lead to dangerous medical outcomes for untold numbers of Americans,” the senators wrote.1 They cited fears the markets could influence patients' thinking about whether to join a trial, and insider-trading risks for researchers and regulators with nonpublic information.1 That is a set of questions, not a finding that a trial has been compromised.
Take Kalshi's answer seriously. When it launched these markets in July, it said it would limit them to late-stage trials, list contracts only after a trial had completed enrollment, and use employee-verification technology for traders.1 Jack Such, a spokesperson, told CNBC the senators' concerns apply equally to the stock market, and that the incentive for misconduct is significantly higher in equities than on Kalshi.1 Investors already buy shares in biotech and drug companies waiting on approvals, Kalshi noted.1 A share is a bet on a business; a contract on a trial or an FDA decision is a more direct wager. Until HHS answers, treat this as a question about trial integrity.
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Tags: regulation · congress · healthcare-pharma · fintech