Prediction Markets Are Creating a New Risk for Pharmaceutical Vendor Contracts
Prediction markets tied to clinical trials, regulatory decisions, and other pharmaceutical events are creating new questions for vendor contracts and confidentiality provisions. This article looks at what pharmaceutical and life sciences companies may want to review in their agreements and compliance policies.
Prediction markets are creating a new compliance issue for pharmaceutical companies.
Platforms now allow users to trade on events such as regulatory decisions, clinical trial outcomes, and other company specific developments. That creates a simple problem: people outside the company may have access to sensitive information before the market does.
In pharma, that can include CROs, laboratories, consultants, data vendors, clinical partners, and other service providers.
The risk is not limited to disclosure. Someone could use nonpublic information to place a position on an event tied to a clinical trial, FDA decision, regulatory milestone, or commercial development without ever sharing the information with anyone else.
That means companies should review whether their contracts restrict not only disclosure, but also the use of confidential information for prediction markets, event contracts, wagering, or similar financial activity.
What companies should review
Pharmaceutical and life sciences companies may want to look at:
confidentiality provisions
vendor agreements
consulting agreements
clinical services contracts
internal compliance policies
reporting and investigation rights
termination rights tied to misuse of information
The issue is straightforward. Contracts written years ago may not address the ways confidential information can be monetized today.
Clinical and regulatory information can have significant value before it becomes public. As prediction markets grow, legal and compliance teams should make sure their agreements reflect that reality.
Lanton, Lanton & Sosa Law PLLC advises pharmaceutical, healthcare, and life sciences companies on contracts, regulatory issues, vendor relationships, compliance, and commercial risk.
For a deeper discussion, see the recent PharmExec article:
Prediction Markets Expose a Gap in Pharmaceutical Vendor Contracts
https://www.pharmexec.com/view/prediction-markets-expose-gap-pharmaceutical-vendor-contracts