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Game of the little red: clinical trials or bets?

Reporting by Pesquisa FAPESPRead the original at revistapesquisa.fapesp.br

Executive Summary

Prediction markets allow individuals to invest money on the possibility of future events, such as the availability of a cure for type 1 diabetes or the approval of specific drugs through clinical trials. Platforms like Polymarket and Kalshi facilitate betting on outcomes related to medical research, including drug approvals, disease treatments, and timelines for scientific milestones. Proponents argue that these markets generate objective information by reflecting collective expectations among users, potentially aiding patients seeking solutions. However, critics raise concerns about the potential for these markets to compromise the recruitment of clinical research, as researchers might avoid less promising studies, and there are worries regarding potential scientific manipulation or fraud within the experimental process if oversight is weak.

Facts Only

* A prediction market allows investment in the possibility of future events.
* Kalshi's platform allowed betting on when Retatrutide would be approved by the FDA.
* Kalshi allowed betting on when a treatment for hereditary angioedema would arrive before or after July 2027.
* A company's timeline for submitting clinical studies against sickle cell disease could be bet on.
* The prediction market relies on user transactions to define contract prices, reflecting collective expectation.
* Economist Genevieve Kanter argued the business model could compromise recruitment for less promising clinical research.
* A researcher expressed concern that betting on the failure of a trial roots for the lack of therapeutic options.
* Regulations focused on clinical research are suggested to make fraud more difficult due to multiple points of control (researcher, company, regulators).
* The prediction market operates differently from traditional betting houses by involving buying and selling contracts between users.
* A federal government prohibited platforms like Kalshi and Polymarket in Brazil as they were not classified in existing betting sectors.
* Leslie McIntosh revealed the existence of a fake network of scientists, the Pharmakon Neuroscience Network (PNN), in 2022.
* A database was recovered listing co-authors of the PNN across published articles and patents.

Full Take

The tension lies between the utility of collective information and the integrity of scientific endeavor. The structure of prediction markets introduces a mechanism where financial incentives—the desire for profit—intersect directly with scientific uncertainty, creating an environment susceptible to both genuine expectation-setting and potential manipulation. The concern is not just about financial risk but about epistemic risk: if participation in research becomes dependent on market sentiment, the pursuit of objective, unbiased knowledge can be undermined. Furthermore, the opacity surrounding clinical research necessitates robust controls; the potential for internal fraud or external influence, as seen with fake scientific networks, suggests that any system reliant on self-reported or partially controlled outcomes demands stringent regulatory oversight, especially when financial stakeholders are involved. The shift observed in Brazil regarding these platforms, viewing them as repackaged bets by the government, highlights a broader societal friction between new digital financial instruments and established regulatory frameworks concerning public health and research.

From the original · Pesquisa FAPESP

Do you bet that the cure for type 1 diabetes will be available before 2033 (or that it won't happen, to the sadness of the more than 9 million people with the disease around the world)? If you wish—and, in all honesty, if you are not in Brazil—you can make this bet.

Read the full story at revistapesquisa.fapesp.br

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