Taking Bets on the FDA

Will the FDA approve retatrutide before July 1, 2027? Or before January 1, 2028?

On Kalshi, you can put money behind your prediction.

Kalshi, a federally regulated exchange overseen by the Commodity Futures Trading Commission (CFTC), allows users to buy and sell event contracts, financial contracts that pay out based on whether a specific event occurs. A YES contract trades between $0.01 and $0.99, with the price reflecting the market's estimated probability of an outcome. For example, if the contract "Will the FDA approve retatrutide before July 1, 2027?" is trading at $0.50, the market is assigning approximately a 50% probability that the FDA will approve the drug before that date.

The growing popularity of prediction markets reflects a broader shift in how everyday investors approach financial opportunity.

According to Martha V. Shelton, Director of Research and Analysis at Talipot Capital, the expansion of prediction markets has paralleled increased retail participation in equity markets and the rapid rise of cryptocurrencies. She argues that the economic aftermath of the 2008 financial crisis helped create the conditions for this trend.

"I think the U.S. economy has been reeling from the extreme monetary policy 'solutions' to the Great Financial Crisis," Shelton says. "Combined with low interest rates, those policies contributed to an uneven distribution of wealth. Many middle-class Americans saw their relative wealth and quality of life decline while financial assets appreciated."

In Shelton's view, many people are now searching for ways to close that gap. Rather than building wealth solely through traditional employment or entrepreneurship, individuals increasingly turn to what she calls "modern-day casinos"; cryptocurrencies, prediction markets, and speculative investing. She notes that approximately 60% of Kalshi trades are for less than $10, suggesting many participants view these contracts as inexpensive opportunities to take a chance on an outcome.

As someone who has spent nearly three decades in clinical research, I find medical prediction markets interesting. They provide a real-time snapshot of how the public interprets clinical trial data, FDA review timelines, and the likelihood of regulatory approval using publicly available information.

But ultimately, the predictions leave me uneasy.

Every clinical trial outcome is built on the experiences of real volunteers. While event contracts are tied to regulatory decisions rather than individual participants, those decisions exist only because thousands of people agreed to participate in research, accepting uncertainty and risk in hopes of advancing medicine.

Clinical research is grounded in ethics. We spend years building systems to protect participants, safeguard data integrity, and preserve public trust. When the outcome of that work becomes a tradable contract, I cannot help but wonder whether we are turning the results of human research into something to wager on.

Prediction markets may improve forecasting. They may even become valuable tools for understanding public expectations around science and regulation. Yet they also raise an important question, “should the outcomes of clinical research, made possible by the participation of thousands of volunteers, become something we bet on?”