What breaks is the firms ability to produce the drugs. Perhaps they don’t stretch and try to develop more marginal drugs (those that would have a higher cost of capital), or they slow the rate of development, or the reduce quality, any number of things can happen.
Unfortunately, given the current state of the American people, your proposal to break the Canadian system by using it would only result in the US adopting it. A quick survey of the leading Dem candidates confirms that would be their desired outcome.
All of these assumptions involve (in the extreme case) every pharamaceutical firm in North America sitting back as Canadian price controls effectively take effect across North America, and saying "well, gee, nothing we can do about it, I guess that's the price". But surely this is incorrect. Static analyses are usually the province of the left.
What's more likely and realistic is that firms would implement a "not for sale in Canada" policy, like I said, so that Canada would be effectively locked out of buying all but the junkiest of drugs, unless/until they relaxed their price controls. This would harm Canada, perhaps, but not us.
Unfortunately, given the current state of the American people, your proposal to break the Canadian system by using it would only result in the US adopting it.
This really would limit R&D and I'd be opposed to it. But I don't agree that it would be an inevitable result of allowing reimportation through Canada.