So the supposition is that drug companies sell drugs to consumers (or governments) around the world at a loss, and US taxpayers provide the missing profit component.
Why?
A very simple question - why would any drug company go out and distribute in other countries at a loss? Generosity? If that was really the case, wouldn't it be far more efficient for them to create a charity to handle these donations and take advantage of US tax code deductions for those contributions? I mean, if you're going to be losing money anyway, why not actually benefit from it slightly.
Does that make the slightest bit of sense?
No? That's because it is profitable to sell in other countries for a dramatically lower price. Oh, but US consumers are paying a higher price as they benefit from quicker access to drugs that are developed from the research that is paid with the higher profits, right?
No, due to the extraordinary FDA drug approval process, you're far more likely to have access to newer drugs in emerging economies.
And that is where we find the germ of the answer: Drugs are more expensive in the US as companies spend more to get them approved, more to advertise them, more to settle lawsuits. You've got to pay for the army of pharmaceutical drug pushers providing free samples and information to doctors across the US. You've got to pay for all those television, magazine and other ads (and sponsorships.) You've got to pay for the industry created discount clubs. You've got to pay for the absolute unlimited ability of a court to take every last penny from a company without legislative oversight.
Is there room to reduce these prices dramatically? Sure, just look at the drug prices in Canada. The stockholder revolts that happen from a CEO going before the annual meeting and detailing the amount of money lost in their charity work in Canada by selling drugs at a loss...don't happen, as they don't sell at a loss.
There is much a president can do to fix this problem, quite a bit of it involves providing leadership to push for legislation in tort reform, limiting the power of the courts to confiscate money wholesale, and in return, secure company agreements to limit advertising expenses.