The entry of prediction markets into the pharmaceutical sector means new pathways to access money, but also brings new risks.
Prediction markets allow users to purchase a stake in the outcome of a given event, ranging from sports events to geopolitical decisions. In May 2026, the two largest prediction market platforms—Kalshi and Polymarket—began offering odds on the outcomes of events in the drug development space.
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For example, as of 30 October 2026, Kalshi offers odds on when the US Food and Drug Administration (FDA) will approve Eli Lilly’s retatrutide, and Polymarket offers odds on by what date the FDA will approve Moderna’s melanoma vaccine intismeran autogene. Users may bet hundreds of thousands of dollars on the potential outcomes of these events .
Industry commentators have been critical against the incursion of prediction markets into the clinical space. Many have questioned the ethics of financial speculation on potentially life-saving medicines, and the impact of a risk of increased insider trading by those able to use private information to inform their purchases on public prediction market.
Meanwhile, Kalshi stated in May that these odds are intended “to help solve drug development’s information silo problem,” by making this information more available to the public.
In an interview, Chelsea Anderson and Noah Solowiejczyk, partners at the US law firm Fenwick, say prediction markets concerning events in drug development are here to stay. Moreover, even private drug developers could now be exposed to the risk of insider trading. Consequently, developers and regulators will need to adapt to mitigate potential shocks which may be felt in the sector.
This interview has been edited for length and clarity.
Frankie Fattorini (FF): Are Kalshi’s claims that there’s value to including the clinical trials in prediction markets valid? For example, could they offer a new means of information sharing and gauging confidence in drug development programs?
Noah Solowiejczyk (NS): I think there are some countervailing arguments. I know Kalshi has released some statements about this: that making estimates and probabilities on whether certain clinical trials are going to succeed is helpful to the public, and that typically it’s a much smaller universe of individuals that have access to these sorts of estimates about the likelihood of success of a particular clinical trial.
There has also been a lot of criticism that this creates an insider trading risk. I’ve also seen some criticism in the pharmaceutical industry about the possibility that this could distort clinical trials themselves, because companies may be worried that if they see that the market is turning against them, they may pull the plug on a clinical trial early because they’re worried it’s going to affect their stock price.
FF: Chelsea, what do you think about that idea that prediction markets could influence drug development?
Chelsea Anderson (CA): It is challenging, in some respects, to extend the prediction markets into this sphere because it is so technical. It’s not an area in which the normal layperson typically has the expertise to determine what will or will not be successful.
Indeed, a lot of scientists and experts are having difficulties predicting what’s going to be successful. So, I take the idea that opening up these prediction markets to every person is really beneficial for giving an indication of how successful something is going to be with a grain of salt.
We’ve seen this in a lot of different spheres, including in the tech space, where there’s been a rise in these secondary markets and companies are trying to manoeuvre to give people access in different ways.
This ties in some ways to a broader criticism of our capital markets. For a long time there has not been a lot of liquidity and opportunities for individuals to participate in private markets in a way that’s really meaningful. This is in some ways an extension of that, which candidly is probably a fair criticism of the way that our capital markets are set up.
FF: Considering these opposing points, what do you think will be the real impact prediction markets will have on the sector?
NS: I’m speculating, but I’m not convinced that if prediction markets make projections about the likelihood of success of a trial, that folks will start dismissing that and say, this stuff’s so technical that whatever the current going rate is in that market is really irrelevant to me as a private investor.
I tend to think that a public signal will affect things and matter to folks, and it will not be so easy to discount it. Say what you will about prediction markets, but there’s some pretty good data showing that they are a pretty accurate predictors of outcomes in many other areas.
An open question for me is how many event contracts (a binary ‘yes-or-no’ outcome of an event, which pays out depending on that outcome) really are going to be out there at the end of the day, especially when regulators continue to get more educated on this market and think through what kinds of event contracts they want to allow or ban.
You might see a major limiting of the types of prediction market contracts, which the Commodity Futures Trading Commission (CFTC) will entertain when it comes to [the healthcare] industry if they decide that there are good public policy reasons to do so.
CA: I would just add that part of the challenge is that insider trading is only one component of this. It’s really part of an entire system that’s designed to protect our public capital markets; which is not in place right now on the private side. Without putting that in place, it’s hard to imagine a situation in which the prediction markets are able to trade in a really fair and equitable way.
FF: Are prediction markets here to stay?
CA: My sense is that they’re going to exist in some form. I do think it’s very likely that there’s going to be much more regulation applied and [questions on the] appropriate subjects for bets, but it seems somewhat unlikely that they’re going to go away altogether. It does feel like there’s a high likelihood that the character of them and what’s permitted is going to shift.
NS: I agree. I think they’re here to stay in some form, but what that looks like may change. As regulators get a more nuanced view on this, they may limit what types of markets exist.
