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Foreign countries do not "dictate prices to drug companies". Single-payer countries like Canada simply buy large quantities of drugs at once. They choose not to buy if they don't like the price, just as I do when I buy bulk toilet paper at Walmart. Market forces being what they are, drug companies sell for less to these bulk buyers, just like any other business. Nobody is being "dictated to" here, except for the American consumer, who has to bend over and accept a monopoly high price for prescriptions.

I can buy a pair of Nike sneakers cheaper in Seoul than I can here. Do you think Nike would allow its dealers in Seoul to sell their sneakers here?

The only leverage Nike, or any other company has when it sells cheaper overseas is threatening to cancel its contract with the foreign customer if it sells out of its designated region. The US government does nothing to enforce the arrangement. But because the Internet acts as the great disintermediator, smoothing markets for goods all over the world, such arrangements are notoriously 'leaky'. An American (or other) consumer can always find some place willing to sell at the lowest price. The result is that American consumers enjoy the lowest prices in the world for most consumer goods, including those produced overseas. Asian electronics, cars, and cameras sell for less in the US than they do in their own countries. Such is the power of the marketplace.

Pharma sales are the exception: US law explicitly forbids shopping around by consumers, which is precisely why McCain is trying to get drug importation legalized. If pharma weren't a special case, there would be no need for this bill. And "public safety", my rosy pink butt. Since we're talking about the FDA-approved real thing here, not knockoffs, there is no differential in safety.

You seem to have some idealized view of how international trade works. FYI: We are not playing on an even playing field. Foreign governments are manipulating currencies and subsidizing exports to make them more attractive to the American consumer. And they use various ways of making imports from the US more expensive and less attractive to their own consumers. It is why we have such huge trade deficits with these countries.

Negotiated Prices. But what about the market power that governments and quasi-governmental entities in Canada and the United States exercise by bulk buying? In the United States, for example, the Department of Veterans Affairs, buying on behalf of veterans, pays the lowest prices. State Medicaid programs, acting on behalf of their enrollees, typically pay the next lowest. If we allow the V.A. and Medicaid to use their clout to get discounts, how can we complain if the Canadian government chooses to bargain for lower prices on behalf of its own citizens?

The answer is that when Canada "bargains" with Pfizer or Eli Lilly it implicitly threatens to ignore the American companies' intellectual property rights. For example, if "negotiations" break down and the American company refuses to sell at the price Canada is asking, Canada reserves the right to ignore the drug patent and allow its domestic firms to produce a generic equivalent - a procedure called "compulsory licensing." In effect Canada says: Give us your drugs at a price we dictate or we'll ignore your patent and produce them ourselves.

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The result is that American consumers enjoy the lowest prices in the world for most consumer goods, including those produced overseas. Asian electronics, cars, and cameras sell for less in the US than they do in their own countries. Such is the power of the marketplace.

LOL. First, taxes have alot to do with the price of consumer goods abroad, e.g., VAT, excise, etc. It is why gasoline is so much more expensive in Europe for example and cheaper in China.

There are plenty of places around the globe that have cheaper prices for consumer goods, e.g., Dubai, Honk Kong, etc.

You should read the link I provided you on the situation in Canada. Should such a law pass, our drug companies would have to ramp up the production of brand name drugs for export so that they could be resold back to us at cheaper prices. Such a solution would hurt our drug industry and development of new drugs. There are also intellectual property and patent issues.