Kalshi's biotech prediction markets draw criticism despite low trading volumes

Kalshi launched in July prediction markets tied to clinical trials and Food and Drug Administration (FDA) decisions, but those contracts are facing increasing criticism from lawmakers and medical researchers as several show scant trading activity. On 11 November 2026, public figures show cumulative volumes of only a few hundred dollars in certain contracts and a reported probability of 71% for Summit Therapeutics’ approval, according to reviewed data.

Letter from two senators and medical warnings

On 11 November 2026, Democratic senators Angela Alsobrooks (Maryland) and Ron Wyden (Oregon) sent a letter to Health and Human Services Secretary Robert F. Kennedy Jr. raising doubts about safeguards against patient risk and potential insider trading. In the letter, the senators wrote:

"Allowing individuals to bet on the success of these trials and drugs undermines the scientific process, creates perverse incentives for researchers, harms trial participants, and could lead to dangerous medical outcomes for untold numbers of Americans." — letter quoted by CNBC.

The missive follows a 29 October commentary in JAMA coauthored by former FDA commissioner Robert Califf and a 2 November piece from Public Citizen calling to ban or tighten restrictions on these contracts.

Academic concerns about trial interference

The JAMA commentators argue that Kalshi’s rule preventing the listing of trial-outcome contracts before enrollment closes does not stop trading while the study remains underway. They cite POLARIS-AD, a Phase 3 Alzheimer’s trial that requires months of follow-up after the last participant is enrolled. They wrote that for trials like POLARIS-AD "the exact period during which Kalshi pins a publicly incentivized financial probability is the period during which that outcome is still being generated."

Researchers warn that public probabilities could influence participant retention in a trial: "Low public probabilities of success could disincentivize continued participation in trials that already impose a high burden on participants, increasing dropout and reducing statistical power," and they add that optimistic probabilities could lead participants to conclude they are in the placebo group and discontinue follow-up.

They also note that a trader who buys a contract that pays if a trial fails would have "a direct financial incentive not only to predict a bad outcome, but to help bring it about." The authors further question whether Kalshi’s employment-verification measures detect relatives, outside researchers, contractors and participants with sensitive information. They note an absence of documented interference cases but call for attention to theoretical risks.

Public Citizen calls for ban or tighter regulation

Robert Steinbrook, director of the Health Research Group at Public Citizen, went further and questioned the public utility of allowing financial speculation on clinical research. Steinbrook wrote that clinical research rests on public trust and "is not meant to provide information to investors and financial markets." He urged the Commodity Futures Trading Commission (CFTC) to act: "Although bets on clinical trial outcomes and drug approvals are legal, they should not be," and proposed that the CFTC ban such wagers or at minimum create a regulatory framework that prevents betting by those with nonpublic information.

Trading volumes: specific cases

Kalshi launched its biotech markets in July together with data provider AppliedXL. AppliedXL monitors public clinical-trial records and FDA filings to help determine whether contracts meet settlement conditions; AppliedXL supplies supporting evidence to Kalshi, which retains final authority over outcomes.

A review of Kalshi’s biotech markets as of 11 November 2026 found very low cumulative volumes on several newly added contracts: $303 on the contract for AstraZeneca’s tozorakimab, $20 on the contract for Mineralys Therapeutics’ lorundrostat, and $0 on the contract for United Therapeutics’ ralinepag. Other contracts showed more activity but still modest figures compared with other Kalshi categories: $11,639 on Summit Therapeutics’ ivonescimab, $4,075 on Gilead Sciences’ anito-cel, and $23,819 on a resolved contract for cytisinicline.

Kalshi also reported that its FDA-approval market for Summit Therapeutics’ ivonescimab had $11,639 in cumulative volume and a 71% probability of approval as of 11 November 2026. Those figures correspond to selected contracts, not the entire category.

Kalshi’s defenses and next steps for the pilot

When unveiling the markets, Kalshi defended that its contracts provide publicly accessible probabilities for individual drug outcomes, as opposed to drug equities that reflect a company’s overall performance. Kalshi described the initiative as a limited pilot and said it would evaluate market performance and trader engagement before any potential expansion.

Kalshi also responded to the senators’ criticism in a statement to CNBC. Kalshi spokesperson Jack Such said:

"The hypothetical concerns of the Senators apply equally to the equities market, which appears to be left out of their letter. The only difference is that the size — and incentive for bad activity — is significantly higher in the equities market than it is on Kalshi." — Jack Such, Kalshi spokesperson, quoted by CNBC.

AppliedXL continues to supply the monitoring evidence that supports contract settlement while Kalshi retains final decision-making on outcomes. The platform and AppliedXL have said they will evaluate performance and engagement before expanding the product.

Practical implications and open questions

Critics raise three concrete questions: whether employment-verification safeguards are sufficient to block insider participation; whether thinly traded markets can provide useful forecasts; and whether trial sponsors should monitor potential effects on enrollment and retention. Audited figures as of 11 November 2026 — including contracts with $303, $20 and $0 of volume — feed the debate about the real utility of public probabilities in low-activity markets.

To follow developments in these markets and the regulatory debate over prediction applied to biotechnology, interested readers can consult coverage in regulation and sector analysis in b2b.