Kalshi and Polymarket Bets On Clinical Trials Criticized As 'Ghastly' (npr.org) 52
An anonymous reader quotes a report from NPR: Billions of dollars are traded every week on the lightly regulated prediction market sites, where users bet on everything from movie reviews to elections to conflicts in the Middle East. Clinical trials are just the latest area where the industry's rapid growth is raising ethical questions. Kalshi claims such bets will provide a new source of information about which drugs will get approved, and what clinical trials will show promising results, which the company says can help investors decide what new drugs to fund.
"If you want to ban profiting from the failure of clinical trials, you would start with the stock market, where the financial incentive for this type of profit is orders of magnitude larger," said Kalshi spokesman Jack Such, pointing to stock market short sellers who have profited from clinical trial failures. "While Kalshi and the stock market are the same in this regard, they do differ in one important way: the stock market doesn't give any valuable information to researchers," Such said.
Drug trial researchers, though, are far from convinced. David Tsai, who runs clinical trials at a biotech company in the San Francisco Bay Area, started an online petition pushing for such betting to be banned, making the case that betting on drug trials "threatens the very foundation of trust and integrity in biotechnology." Tsai is concerned that the prospect of betting provides those involved with a clinical trial a reason to tamper with the results for a prediction market payout. "If we were running a trial for an oncology drug that requires an infusion, a pharmacist who had placed a bet saying that it's gonna work well, or doesn't work well, could obviously adjust the infusion rate, could adjust the source temperature of the drug," he said. "They could change any number of variables that could obviously have a direct impact [on] how the trial and the data and the patient safety would come out."
Another skeptic is Nicholas Zaorsky, a professor of radiation oncology at the Mayo Clinic in Jacksonville, Fla., who has helped run clinical trials and agrees that prediction markets can interfere with the advancement of life-saving drugs. "Prediction markets can be valuable in some settings because they aggregate information, but clinical trials are fundamentally different: investigators, coordinators, and sometimes even participants can directly influence aspects of the outcomes being wagered on," Zaorsky said. "That creates financial incentives that risk undermining trial integrity." Bettors should not be rooting for an experimental medicine to fail just to earn a buck, says Joshua Pederson, the father of a 12-year-old cancer patient enrolled in a clinical trial. "It's a dark idea," he said. "It's quite ghastly."
Kalshi, for its part, argues that its prediction markets could help patients track promising medical breakthroughs and clinical trials, enlisting experts including 23andMe founder Anne Wojcicki to make the case.
"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," a white paper sponsored by Kalshi stated.
"If you want to ban profiting from the failure of clinical trials, you would start with the stock market, where the financial incentive for this type of profit is orders of magnitude larger," said Kalshi spokesman Jack Such, pointing to stock market short sellers who have profited from clinical trial failures. "While Kalshi and the stock market are the same in this regard, they do differ in one important way: the stock market doesn't give any valuable information to researchers," Such said.
Drug trial researchers, though, are far from convinced. David Tsai, who runs clinical trials at a biotech company in the San Francisco Bay Area, started an online petition pushing for such betting to be banned, making the case that betting on drug trials "threatens the very foundation of trust and integrity in biotechnology." Tsai is concerned that the prospect of betting provides those involved with a clinical trial a reason to tamper with the results for a prediction market payout. "If we were running a trial for an oncology drug that requires an infusion, a pharmacist who had placed a bet saying that it's gonna work well, or doesn't work well, could obviously adjust the infusion rate, could adjust the source temperature of the drug," he said. "They could change any number of variables that could obviously have a direct impact [on] how the trial and the data and the patient safety would come out."
Another skeptic is Nicholas Zaorsky, a professor of radiation oncology at the Mayo Clinic in Jacksonville, Fla., who has helped run clinical trials and agrees that prediction markets can interfere with the advancement of life-saving drugs. "Prediction markets can be valuable in some settings because they aggregate information, but clinical trials are fundamentally different: investigators, coordinators, and sometimes even participants can directly influence aspects of the outcomes being wagered on," Zaorsky said. "That creates financial incentives that risk undermining trial integrity." Bettors should not be rooting for an experimental medicine to fail just to earn a buck, says Joshua Pederson, the father of a 12-year-old cancer patient enrolled in a clinical trial. "It's a dark idea," he said. "It's quite ghastly."
Kalshi, for its part, argues that its prediction markets could help patients track promising medical breakthroughs and clinical trials, enlisting experts including 23andMe founder Anne Wojcicki to make the case.
"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," a white paper sponsored by Kalshi stated.
Yep. (Score:1, Troll)
A lot of people behave pretty ghastly when it comes to money.
do they have an licensed doctor on staff and not o (Score:2)
do they have an licensed doctor on staff and not one what went to hollywood upstairs medical college?
Assassination bets when? (Score:3)
Re:Assassination bets when? (Score:4, Interesting)
Conflicts of interest (Score:2)
"If you want to ban profiting from the failure of clinical trials, you would start with the stock market, where the financial incentive for this type of profit is orders of magnitude larger," said Kalshi spokesman Jack Such, pointing to stock market short sellers who have profited from clinical trial failures. "While Kalshi and the stock market are the same in this regard, they do differ in one important way: the stock market doesn't give any valuable information to researchers," Such said.
Many companies prohibit employees from doing anything with their company stock other than holding the stock long. No shorting. No margin. No options. Why? One thing is to eliminate the incentive to manipulate their work for their own personal financial benefit. So, if Kalshi were serious about the stock market comparison, they would prohibit any employee, experimental subject, or others connected to the clinical trial from participating in Kalshi bets on that trial.
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Many companies prohibit employees from doing anything with their company stock other than holding the stock long. No shorting. No margin. No options. Why? One thing is to eliminate the incentive to manipulate their work for their own personal financial benefit.
Not just the company. The Securities and Exchanges Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the DOJ, and the FBI all have power to enforce rules on insider trading. Even company-issued options are okay. That's often how higher-level employees get compensated.
Shorting and market options are not legal though. Nor is trading on insider information. Company insiders privy to such information must announce their trades well in advance, so that the rest of the market knows about them
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You think I'm shilling? No. I have no interest in investing in or placing any bets in predition markets. I'm just interested in supplying facts about them.
My interest arises from being an individual trader in stocks and options. (Not yet in futures.) I'm intrigued by some of the similarities these markets have to the predictions markets.
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I have it on good authority that the president can insider trade and nothing can be done about it. SCOTUS said so. Even lower elected officials apparently are perfectly okay to do this.
So we should dispense with the "it's illegal to insider trade" because clearly it's only illegal for unelected officials. Elected officials are, it's perfectly okay.
Sigh.
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Elsewhere in this discussion, I have called attention to the distinction between insider trading and trading on insider information. The former can be legal, the latter is not. Company employees trade in their stock all the time, perfectly legally, by announcing their trades in advance if they are privy to insider information. That way they don't have an advantage over other traders. But let's follow your use of the term for this post.
I have it on good authority that the president can insider trade and nothing can be done about it. SCOTUS said so.
SCOTUS said the President is completely immune for core acts, and presump
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America Briefly Horrified by its Own Reflection (Score:1)
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I have to congratulate you on that subject line.
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ok, now imagine your kid was taking part in a clinical trial and ended up dying in pain and some guys made a ton of money out of it.
still fine ?
Re: Illiberals attacking liberty (Score:3)
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That being said, over the past few years, I’ve spent some time arguing onl
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Fine? No, I'd be devastated by the death. But why would somebody else's making money — not "out of it", but by predicting it — affect me at all? They didn't kill the child. They didn't contribute to his dying.
Yeah, going home from a funeral — of anyone close to you — and watching people carelessly enjoying their lives unaware of your tragedy is annoying. But you don't get mad at them. Or, maybe, you do — because you're a fool controlled by emotions, rather than rat
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The argument against it was in the summary. You didn't even need to RTFA to find that out.
Betting is not like stocks (Score:5, Insightful)
TFA: "If you want to ban profiting from the failure of clinical trials, you would start with the stock market, where the financial incentive for this type of profit is orders of magnitude larger," said Kalshi spokesman Jack Such, pointing to stock market short sellers who have profited from clinical trial failures. "While Kalshi and the stock market are the same in this regard, they do differ in one important way: the stock market doesn't give any valuable information to researchers," Such said.
This is either ignorant and/or maliciously deceptive for the simple fact that there are rules against insider trading. Investors in pharmaceutical companies are not (or at least, should not be) privy to modifying the conduct of a trial in order to secure or deny approval. There is no similar oversight for these betting markets. Sure, they might say that your wager could be disqualified if it comes out that you interfered in the outcome, but that is little comfort for the trial participants and the drug sponsors, who can't just hop into a time machine and run it back.
And that's why there are so many regulations surrounding the conduct of clinical trials. People might argue that there is corruption and untoward influence already--that FDA approvals (especially under the current administration) are not necessarily based purely on scientific and medical legitimacy. But that's a very strange argument to put forth in defense of enabling MORE interference.
While I'm at it, let's also just shut down the absurd idea that betting markets somehow facilitate better information sharing about novel treatments. The point of these trials is to gather the evidence in an unbiased, objective, scientific way. Betting on them is not going to gather you any more meaningful evidence than what the trial designers have specified in the study protocol. The idea that "the market is efficient" is not in any meaningful sense a scientific approach to deciding whether an investigational product actually works. If that were the case, the FDA would be basing approvals off stock prices.
Honestly, who do these assholes think they're fooling? The only reason why they want to do this is because the house takes their cut, win or lose.
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This is either ignorant and/or maliciously deceptive for the simple fact that there are rules against insider trading. [...] There is no similar oversight for these betting markets.
Actually there is. Kalshi, like other prediction markets, is regulated by the Commodities Futures Trading Commission. They have the power to investigate insider trades and determine whether they are legal or not.
And yes, insider trades can be, and usually are, perfectly legal. For example, company executives often get paid in stock, and need to sell stock because they have bills to pay just like everyone else. But they must announce their trades well in advance, to ensure they are not trying to profit from
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It seems pretty obvious that when most people use a phrase like "insider trading" in this context, what they are really referring to trades motivated by access to insider information - not the straightforward trading by company insiders that you mention.
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I agree. I confess I slip and do the same thing sometimes. It's certainly pithier to just say "insider trading" instead of "trading on insider information" even though they're not the same. I just lament the loss of the distinction, and sometimes feel the need to point it out.
I guess I'm just in the crowd that cringes when it sees language deteriorate, like when people misuse "beg the question" to mean "pose the question" instead of the proper meaning of "insert a conclusion into a premise."
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You're not an insider if you don't have insider information, regardless of who you work for. The OP used the term correctly, both as its commonly understood and as it's defined:
https://en.wikipedia.org/wiki/... [wikipedia.org]
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And yet company employees who are insiders (by your implied definition) can in fact trade in the company's stock legally as long as they follow certain rules. What kind of trading do you call that?
Never mind, it's called insider trading. Trading ... by an insider. It's legal if the trader follows the rules, and illegal if they don't.
Having insider information is not the same thing as trading on insider information. The former is legal, the latter is not. To keep the latter from happening, insiders must anno
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I almost added a comment to that previous post about my own tendency towards pedantry... so I totally get it.
Or perhaps a Futurama quote would've been better, e.g. "You are technically correct. The BEST kind of correct."
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They are mainly fooling 20-something poor students who worry about the future and think gambling is the only way to escape the underclass.
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if the game is rigged
If?
20-something poor students
20-something poor students are literally bathed in rigging the instant they experience initial contact with post-secondary education in the US. They know, with metaphysical certitude, that rigging runs their world, and whatever goes on a polymarket is but the least of it. Only the clinically naïve somehow miss this.
NPR lost the plot on this article (Score:2)
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There is exactly zero difference between choosing an outcome of a trial and buying or shorting the stock for that company
I disagree. There are mountains of information about a company from its many earnings calls, to open audited reports, historical stock prices, and effects of competition of anticipated buy/sell habits of other investors. This is "investment".
There is minuscule public (non-insider) information about medical trials. This is "gambling".
Just because you are predicting an outcome on something doesn't mean you can effect its results
Mr. Beast's video editor who was placing bets on what would be said in videos
These two statements of yours seem to be at odds. The existence of gambling markets instigate change by those being gambled upon.
https://www.ncaa.org/media-cen... [ncaa.org]
https://www.esp [espn.com]
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Typically there's quite a bit. "New" drugs usually have quite a bit of published pre-clinical work, sometimes going back decades, and previous phase clinical trials must be published.
Yes. All all the justifications Kalshi came up with are bullshit. Either things that already exist in a non-gambling form (e.g. clinicaltrials.gov) or are not useful.
new levels of stupid (Score:2)
Kalshi appears to be a test for just how stupid our legal system can get.
It's not gambling, it's just futures contracts for things people gamble on! With the exact same stakes and premise as gambling! But, totally not!
They're playing a game of ad absurdum vs gambling and the stock market, and it continues with this argument. "Well, people can already engage in illegal insider trading on the stock market, so we are free to make it even easier, for profit".
I'm no Wall Street or online gambling fan, but making
Vaccine researchers discover conflict of interest? (Score:3)
This is really no different from many other areas in which you can have conflicts of interest. For example, sports! And the answer isn't to ban betting, it's to ban betting by people who have a conflict of interest. This is well-trod ground.
I'm not particularly a fan of Kalshi or Polymarket and don't really care if they exist or not. My point is just that this isn't really any different from anything else.
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Fair enough, but Kalshi also has the nerve to claim they are NOT gambling. Sports betting doesn't hide it, they just somehow legalized the crap out of doing it online, by popular demand, after many decades.
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Fair enough, but Kalshi also has the nerve to claim they are NOT gambling. Sports betting doesn't hide it, they just somehow legalized the crap out of doing it online, by popular demand, after many decades.
Meh. "Gambling" is such an amorphous term when it comes to betting on events that aren't carefully constructed to be the result of pure chance.
Insurance, not stock market (Score:2)
Life Insurance is all about betting on death. The standard Life Insurance is a bet by the corporations that you will live long and pay many premiums. This means when you buy life insurance you are betting you will die quickly.
When Life Insurance gets re-insurance they are in fact betting you will die. Same when a business gets life insurance on 'key employees'.
Then there is a whole business called 'viatical settlements' where you buy life insurance on another person. This was a big deal when AIDS appea
And yet... (Score:2)
Lol (Score:2)
Re: Lol (Score:2)
"Prediction Markets" are ghastly (Score:2)
"Crowd wisdom" IS trading on insider information (Score:2)
Prove me wrong.
"Ghastly" (Score:2)
That's where I stopped. NPR wine women language. These people have no problem with all manner of "ghastly" things going on, as long as it serves their virtues. I'm inclined to chalk this up to yet another moral panic among the privileged, and few others. When you look closely at the entire opioid conspiracy that went on in this country, you find an endless supply of NPR listening pant suited professional babushkas managing the clinics, pencil whipping the audits, and indulging their limitless altruism w
The pretense of "not gambling", fixing outcomes (Score:2)
like child molestors (Score:2)
This is already done by investors (Score:2)