[msandford]

It does have to do with IP. If there was a worldwide IP regime in place, EVERYONE would have to pay what the drug companies demanded, or let their citizens die without the drugs (in countries with single-payer).

Since the drug companies know that Canada or countries in Europe could -- if they so chose -- make new laws that strike down the validity of their patents. But that would take time to do and require specialized laws that only dissolved drug patents or whatever. So they sell the drugs cheaply.

There's no negotiating like that here in the US because this is where the major pharma companies are headquartered and where they spend a lot of money lobbying for excellent protections. As a result their patents are safe here.

But their patents are not safe overseas which is why those countries tend to get a better deal on their drugs on the whole. It's different because those involved in the buying can alter the regulatory environment. Those involved in the buying here can't make such a credible threat and as a result, higher prices.