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.