You aren't "setting" anything. You are letting Americans purchase drugs at the lowest price they can find. If Canada mandates a ceiling, and some drugs are available through Canada at the ceiling price, so be it; what's the problem?
Does Canada make a lot of drugs? Or do they rely upon the enterprise and creativity of Americans to create and produce the drugs they enjoy?
I don't know. What does it matter? Evidently there are some drugs made by American companies that they find worthwhile to sell to Canada, even though there are price ceilings. That's a choice they make.
The worst possible outcome I can envision is that, if the U.S. started purchasing drugs through Canada's price ceiling at a greater rate, then it would no longer be worthwhile for so many companies to sell drugs to/through Canada as a "loss leader", and so they would cease. In other words, the "worst" outcome is that we destroy the effectiveness of Canada's price ceilings, or at least force them to raise to something approaching true market value.
But depending on how you look at it, that could be considered a good outcome.
But as President if he wishes to remove the motive for the development of new drugs he is a fool.
Neither you nor Will has explained how this would remove the motive for development of new drugs.
If the price of the drug is set to recover the cost of capital, and the Canadian’s choose to arbitrarily reduce the price and make the drug less than the price necessary to meet the cost of capital you will not be in the business to produce drugs. It’s pretty simple really.
As an American I’m angry I am subsidizing the drug costs of Canadians. Clearly their price caps are requiring drug sales in the US to be at a higher price so the firms can recover their investment. You want the price of the drugs to go down, you force the Canadians to purchase the drugs at the price necessary for the firms to recover their investment.