You can do this by paying less to the pharma companies in America. That will force them to hike prices elsewhere. Because we pay such high costs here, there is no incentive for them to charge higher prices elsewhere.
if the govt sets the prices, how in hell will we not have shortages of prescriptions, doctors, and medical equipment?
The government does not have to set the price. The government could negotiate the price for its programs the way a pharmacy benefit company like Medco does. Say, on the list of approved or priority drugs, the negotiators could tell the pharma companies which produce competing products that the government will prioritize the drug for its program that comes in at the lowest cost.
A more extreme option would be to set a price list for all new drugs such that companies would be able to earn a specific return on equity for different classes of drugs, depending on where they are in their lifespan. This would be similar to the electrical utility industry.
You can also lower the number of years that a drug has a patent from 20 years to 16 or 18 years.
The pharmaceutical and biotech industry has one of the highest returns on equity of any industry, partly because of patent protection. Patent protection is a government enforced monopoly in a market. The government already is interfering in the market and probably is allowing the drug companies to extract economic rents through the legislative process now.
I'm not necessarily advocating any of these. I'm just pointing them out.
Remember, an industry that is near and dear to conservatives hearts, is the defense industry. Who buys ships and fighter planes? You and me? No, the government. The government sets the prices in the defense industry.
As for Divecons suggestion of banning foreign sales, forget for a moment that such a move would violate virtually every single trade treaty the United States has ever signed, if we are going to tell companies what they can and can't do, why not ban them from lobbying?
Oh, and we could reform tort laws. That would be a good one.