Only one new drug for treating any kind of childhood cancer has come out in the past 20 years.
The Creating Hope Act is expected to shorten the wait for the next new drug.
Nancy Goodman spearheaded the law after her 10-year-old son Jacob Froman died of a rare form of brain cancer.
Drug companies have had little incentive to develop pediatric cancer drugs for patients who represent less than 1 percent of all cancer cases.
"So we created a big fat carrot," Goodman said. "If a pharmaceutical company creates a drug for pediatric cancer or other pediatric rare disease that company gets a voucher and the voucher comes with speedier FDA review of another drug."
Quicker review of new drugs for common problems such as arthritis or health disease could be worth millions to drug companies.