Obama signed the bill at a ceremony on the White House campus flanked by Vice President Joe Biden and key lawmakers.
The 21st Century Cures Act invests $1.8 billion for a cancer research "moonshot" that is strongly supported by Biden. The vice president's son Beau died of brain cancer in 2015.
The bill also authorizes giving states $1 billion over two years to prevent and treat the abuse of opioids and other addictive drugs like heroin.
Overall, the measure plans $6.3 billion in new spending over the coming decade. The bill also streamlines the approval process for drugs and medical devices at the Food and Drug Administration.
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