Ethics of Kalshi's Drug Betting Markets: Jonathon Kimmelman, PhD

Kalshi, a prediction market app and the first such platform regulated by the Commodity Futures Trading Commission (CFTC), announced new contracts in July 2026 allowing users to bet on FDA approval decisions for cancer and multispecialty drugs, as well as the progression and outcomes of phase 1 through 3 clinical trials.¹

These contracts pose serious ethical concerns for the patient populations touched by clinical trials and FDA approvals, according to Jonathon Kimmelman, PhD, professor of biomedical ethics and associate member of the Department of Experimental Medicine at McGill University. Insider betting is one of his biggest concerns, despite Kalshi's stated safeguards. Another concern he raised, drawing on his expertise in population behavior, is the risk of information bubbles distorting how the public interprets drug development news.

“When you're making judgments based on what other people are saying, that can lead to information cascades, the equivalent of what people sometimes call bubbles, where people [engage in] herd behavior, and that can lead to really, really inaccurate judgments and distortions,” he explained in an interview with The American Journal of Managed Care^® (AJMC^®). “And prediction markets do raise the risk that rather than people forming independent judgments based on the evidence, they're forming judgments based on what other people are doing, and that is just amplifying inaccuracy.”

Beyond herd behavior, bioethicists have raised concerns that these markets could enable insider trading and send misleading signals about a drug's true clinical value.

Currently on Kalshi's site, there are more contracts allowing users to predict when an FDA approval will occur than whether it will be approved at all. At the time of AJMC's investigation, there was only 1 recorded contract for a clinical trial outcome.

However, this may be subject to change as the markets grow. Only then will the true extent of these contracts' consequences for clinical trial progression and FDA approval decisions become clear.

Read more about this issue here.

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Reference

1. McCrear S. FAQ: Kalshi's cancer drug betting markets raise ethics concerns. AJMC. September 4, 2026. Accessed September 22, 2026. https://www.ajmc.com/view/faq-kalshi-s-cancer-drug-betting-markets-raise-ethics-concerns