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Buried deep within the Inflation Reduction Act’s drug-price negotiation provisions is language that could open the way to a new era of biomedical breakthroughs and smarter health spending.

This language does something Medicare hasn’t tried before: It ties payment for treatments to how well they work. Doing so used to be illegal. But it will now be required for some drugs.

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For the future of health spending, this is a bigger deal than Medicare’s power to negotiate drug prices. It could also energize industry as a partner in President Biden’s Cancer Moonshot and other efforts to transform treatment of diseases. Here’s why:

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