BrainTrusters: About

The idea that aggregate wisdom is superior to the wisdom of individual experts was proposed in the early 1990s by a scholar, Robin Hanson, currently at George Mason University.

http://hanson.gmu.edu/home.html

http://hanson.gmu.edu/ideafutures.html

It was popularized by James Surowiecki, an economist who writes for the New Yorker, in his 2004 book, The Wisdom of Crowds. It has been commercialized for the prediction of sporting events by ProInfo (the Pittsburgh Steelers will win the Super Bowl) and for the prediction of current events by NewsFutures (the Iranian government will agree not to develop nuclear weapons).

No prediction market for clinical drug trials exists. Yet the FDA-sponsored drug approval process seems a natural topic for a prediction market. We have chosen to create a marketplace for clinical drug trials, and, at the outset, to restrict it to cancer drugs.

Providing effective treatment of cancer is one of the most compelling problems in public health. There is no single treatment for all cancers, there is no single best treatment for any cancer type, and there are many potential cancer drug targets. Cancer drug development is an active and important field requiring tremendous investment in intellectual and financial capital. In accordance with the idea that the wisdom of crowds is superior to the wisdom of individual experts, we have created a market of FDA-sponsored clinical cancer drug trials that expresses the aggregate wisdom about specific new cancer drug development.

It is our intention that this prediction market will inform the decisions of industry and academic scientists, investors and public health officials. BrainTrusters is a noncommercial effort. The program will be conducted for two years and will terminated December 31, 2008.

Clinical Trials for Cancer Drugs

Before they can come to market, new drugs must be approved by the FDA. Approval follows the successful completion of a three-phase trial: phase I evaluates safety; phase II defines the optimum dose; and phase III establishes efficacy. Most drugs do not successfully navigate the trial process and, therefore, are not approved.

The duration of trials varies based on the number of patients and the endpoint of follow-up, both of which are negotiated by the FDA and the sponsoring company at the outset. Generally, trials are lengthy. Phase I may last several weeks or a few months, but phases II and III last about one year. A trial is considered open as long as patients are being recruited. A trial is closed when all patients have been recruited. A trial is active until all recruited patients have been treated and followed the predetermined period. A trial is no longer active when treatment and follow-up are complete. Then the results are presented to the FDA. The agency must make a determination within 90 days.

How the Prediction Market Works

The National Cancer Institute maintains a database of all clinical trials from which we will select those that meet these criteria: [1] new drug trial; [2] sponsored by a pharmaceutical or biotech company.

At the outset we will promote the prediction market exclusively around the journal, Cancer Biology & Therapy. The approximately 150 public- and private-sector scientists who comprise the journal's Editorial Board lead research labs, and graduate students and post-docs in their labs will be invited to open accounts at the website. Membership will be capped at 500 participants. Each account will be funded with [a virtual] $10,000 to be invested in cancer drug trial prediction markets. Participants are encouraged to select usernames not associated with their true identity and all account information will be confidential.

Each drug trial will constitute a prediction market so at any time several prediction markets will be ongoing. Participants can buy contracts in prediction markets for any price between $0-$100. The price they select is a reflection of their confidence that the drug will complete the trial successfully. There will be two prices. The mean of all contracts of all participants is the current market price because it reflects the aggregate wisdom of the marketplace regarding the prospects of the trial. The mean of all contracts held by a single participant, on the other hand, represents that individual's confidence in the outcome of the trial and is the individual price. Each participant will have her own individual price of course.

Since phases II and III clinical trials generally last one year or more, new information about the drug and about the trial may be disclosed during the trial which enhances or diminishes participants' confidence in the outcome. Participants, thus [newly] informed, can return to the marketplace and buy contracts at prices reflecting the recent information. When a trial is no longer active, the prediction market corresponding to that trial is closed. No contracts can be purchased, and the market price at that time represents the final aggregate wisdom of the market.

As the FDA makes its decisions on trials, the difference in the market price and the individual participant's price multiplied by the number of contracts owned by the individual is credited or debited to the participant's account. For example, take an approved drug with a closing market price of $60. A participant who owned 20 contracts in that prediction market and whose individual price for that trial was $70 will be reimbursed for the entire investment ($1400) and also receive difference between market and individual prices, $10, multiplied by the number of contracts ($200). An individual who owned 20 contracts and whose market price for the trial was $30 will have her account debited by the difference between the market and individual prices, $30, times 20 contracts ($600).

As trials conclude and FDA decisions are handed down, accounts are credited and debited. Participants will be ranked. Those 25 with the largest accounts may receive cash or cash-equivalent awards to be determined.

About the Logo

The BrainTrusters logo depicts a man seated on a park bench– an allusion to Bernard Baruch, the Park Bench Statesman.

Bernard Mannes Baruch (August 19, 1870-June 20, 1965) was an American financier, stock market speculator and statesman. Perhaps he was best known as a trusted adviser to Presidents Woodrow Wilson and Franklin D. Roosevelt. Baruch was member of FDR's inner circle of academics and strategists, known as the Brain Trust.

The park bench became Bernard Baruch's trademark. He was frequently seen waiting to meet with the President on a park bench in Lafayette Park. It was said that his office was a park bench near the White House. "The Bench of Inspiration" in Lafayette Park across from the White House was dedicated to Bernard Baruch in 1960.

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Background

Clinical Trials for Cancer Drugs

How the Prediction Market Works

About the Logo