On the betting websites Kalshi and Polymarket, people can now wager on whether the Food and Drug Administration will decide this year to approve medicines for cancers of the lung, breast, pancreas and blood.
Kalshi also plans to allow users to bet on whether drug trials will succeed.
Researchers, doctors and patients said that these prediction markets threaten to undermine the drug development process. They said they worry that study results could be compromised, insider trading could go undetected and public trust could be eroded.
“Turning loose a betting market in an ongoing randomized clinical trial really is a breach of scientific conduct,” Dr. Robert Califf, who was the F.D.A. commissioner in the Biden administration, said.
For example, the critics said, participants might drop out of an ongoing study, or trial administrators could unconsciously alter their behavior, because they were discouraged by a public prediction market suggesting their study was doomed to fail.
A Change.org petition urging regulators to crack down on betting on drug development had more than 180 online signatures as of publication time. The betting, the petition said, “threatens the very foundation of trust and integrity in biotechnology.”
Emily Hilliard, a spokeswoman for the Department of Health and Human Services, which oversees the F.D.A., said that agency employees are “subject to stringent ethics requirements.”
In recent months, Kalshi and Polymarket have grown rapidly and become cultural phenomena, allowing online betting on sports, politics, pop culture, geopolitical events and more. The platforms have also generated mounting scrutiny over how they police trading based on inside information.
Earlier this month, on the same day that Kalshi announced that it was expanding into wagers on drug trials and approvals, the company also said that a White House teleprompter operator had used his inside knowledge about what President Trump would say in his speeches to win about $100,000 by placing bets on Kalshi.
Kalshi’s drug development wagers, which started popping up on the site several months ago, are yes-or-no questions, such as “Will the FDA approve camizestrant for advanced breast cancer?” As of publication time, traders collectively gave it a 64 percent probability for approval by the end of this year.
A spokesman for Kalshi, Jack Such, said that the company was taking steps to try to safeguard the research process, such as verifying where traders work and not allowing wagers until after studies had finished enrolling participants.
Mr. Such said that prediction markets posed no new concerns for research integrity that haven’t already existed for decades with stock market investing in drug companies. Pharmaceutical and biotechnology stocks swing, sometimes sharply, on the results of closely watched clinical trials and regulatory decisions.
He argued that Kalshi was enabling the wisdom of the crowds to cut through public relations spin and hype, providing a clear signal that could direct investment and resources toward the most promising experimental drugs.
“This is an incredibly important, incredibly sensitive, incredibly impactful subject matter area,” Mr. Such said. “This is why the people making decisions need to have the best possible information available, and the avenue for the best possible information is traders on Kalshi putting money where their mouth is.”
He suggested that people with sophisticated scientific knowledge but no inside information, such as a retired physician, a medical student or even an avid learner, would be best suited to make informed predictions.
Rival site Polymarket allows people to bet on the regulatory fate of several experimental medicines, including hotly anticipated drugs for weight loss and pancreatic cancer. Polymarket declined to comment.
In interviews, cancer patients and clinical trial participants said they felt the prediction markets crossed a disturbing line. They noted that in many late-stage cancer drug trials, success or failure is measured by how many participants survive.
“We’re literally trying to stay alive. It’s not a game,” said Walter Ingaharro Jr., 43, of Evington, Va., who has metastatic pancreatic cancer and is exploring clinical trial options. “The introduction of gambling into the process really creates an ethical mess.”
Kristin Ruben, 37, of Northampton, Mass., who has lung cancer, said she was appalled by the new prediction markets. “This feels like pure gambling for the sake of the game,” she said. “This is about who will live and who will die.”
A number of states have tried to ban the prediction markets, saying they are an attempt to sidestep local restrictions on sports gambling.
But under the Trump administration, the Commodity Futures Trading Commission, the federal agency that regulates prediction markets, has been broadly permissive of the boom in betting and has encouraged its growth. The president’s son, Donald Trump Jr., has ties to Polymarket and Kalshi.
Last month, the C.F.T.C. proposed rules for how it would evaluate and block wagers that it deemed contrary to the public interest, closely eyeing those involving terrorism, assassination and war. The agency declined to comment on the new wagers on drug development.
In recent months, Kalshi filed documents with the C.F.T.C. that suggested it might soon offer a range of bets related to medicines beyond the plans it already announced.
The filings are templates for the types of wagers that the company might make available on its site, without naming specific medicines or drugmakers. These templates are self-certified, meaning that the company is notifying the C.F.T.C. that it may list these types of bets. The regulator can object but rarely does so.
Among the proposals: Whether the F.D.A.’s public tally of reported side effects and other adverse events for a drug will reach a certain number; whether trial results will be reported in a certain time period; and whether the F.D.A. will withdraw a drug from the market by a specific date.
Kalshi said it discussed its move into drug wagers with independent experts, including Anne Wojcicki, who co-founded 23andMe, the consumer genetics company, and now runs it as a nonprofit.
“The opportunity to have an open, transparent data set about trial probabilities is extremely promising and empowering for people,” Ms. Wojcicki said in a report issued by Kalshi. She was not paid for the conversations.
Mr. Such said that, as with other types of wagers listed on Kalshi, the company accepts ideas for potential biotechnology bets from the public or even its employees. An internal team at Kalshi reviews the ideas to ensure that they comply with the law and drafts the language, he said.
Pharmaceutical companies don’t get any say about whether their experimental drugs are featured. Several drugmakers, including Eli Lilly, Sanofi, Daiichi Sankyo and Ultragenyx Pharmaceutical, said they prohibit their employees from using confidential information to bet in prediction markets.
Kalshi said it would prohibit trading by a wide range of people involved in developing an experimental medicine, including trial staff, data monitors, F.D.A. regulators and employees of the drugmaker.
It also said it would prohibit trading by patients enrolled in the clinical trial or by employees at rival drugmakers who might want to shift public perception about a competing product. Kalshi said its surveillance team monitors and investigates suspicious trades, then refers them to regulators if appropriate.
For now, Kalshi said, the betting will be limited to late-stage studies, where success is more clearly defined. And at least initially, Kalshi will not allow betting on studies that exclusively enroll minors, because those studies tend to be small and the company was concerned about individual children and teenagers being identifiable, Mr. Such said.
Critics said they worried that Kalshi’s proposed safeguards were inadequate. They pointed out that Kalshi did not have access to the long list of people involved a clinical trial, which is not public.
Amanda Fischer, a former chief of staff at the Securities and Exchange Commission, said that the prediction markets for drug development were effectively recreating stock market investing with fewer guardrails. Compared with the C.F.T.C., the S.E.C. has more resources and stricter legal requirements to police insider trading and market manipulation, she said.
Biotechnology prediction markets operate as a “shadow market,” where “you start to get bets that look like a backhanded way to essentially bet on the equity price,” said Ms. Fischer, who now directs policy for Better Markets, a nonprofit that pushes for strong financial regulation.
David Tsai, who started the Change.org petition and has spent his career helping run drug studies, said he worried that trial participants would lose faith in a research process that could be tainted by betting. “Clinical trials are not casinos,” said Mr. Tsai, who works at Scribe Therapeutics, a biotechnology company in the San Francisco Bay Area.
Holly Fernandez Lynch, a bioethicist at the University of Pennsylvania, said she was concerned that prediction markets would be “creating really horrible incentives where we need the science to be very clean.”
She added, “Anything you do that undermines trust in clinical research can have really negative downstream effects.”
