Kalshi to offer betting on drug trial results and FDA decisions

Kalshi is venturing into new prediction territory by allowing users to bet on drug trial outcomes and FDA regulatory decisions. The platform aims to bring transparency to the largely opaque drug development industry, where crucial data is often kept private.

CEO Tarek Mansour stated that the company's goal is to surface information that would otherwise go unreported. He believes that publicly listed contracts will offer a continuously updated probability that reflects the weight of evidence, rather than the preferred message of trial sponsors. "Drug development is one of the most important and most information-constrained industries on earth," Mansour said.

The expansion is launching as a pilot program in partnership with AI firm AppliedXL. However, prediction platforms like Kalshi face criticism regarding risks of market manipulation and insider trading. Recent reports highlight investigations into individuals, including a former congressman and a teleprompter operator, for alleged insider trading related to political events.

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Drug development is one of the most important and most information-constrained industries on earth. The data that determines which drugs advance and which don’t is largely locked away from the people who need it most. Surfacing information is what Kalshi is for, and we are committed to doing it right: compliance-first, carefully scoped, and built for the long term.

To mitigate these risks, Kalshi will require employment verification and will only list contracts after a drug trial's enrollment closes. The company also released a white paper detailing its approach, which included endorsements from healthcare leaders like Anne Wojcicki, founder of 23andMe, who praised the potential for an "open, transparent dataset about trial probabilities."

This move follows Kalshi's recent plans, revealed in filings with the US Commodity Futures Trading Commission, to offer contracts for betting on flight cancellations. These contracts would be based on data from flight tracking company FlightAware.

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Most patients don’t know about the choices available in clinical trials or which programs are most promising. The opportunity to have an open, transparent dataset about trial probabilities is extremely promising and empowering for people.