The reason the rest of the world is cheaper is because their health care systems are subsidized by US taxpayers, US pharmas, and US medical device makers.
US Pharms do the R+D, operations, marketing and manufacturing that US investors and taxpayers pay for and then the rest of the world gets all the benefits at a lower cost per pill/treatment
Merck, Pfizer, BMY-Squibb, Lilly, JNJ, Abbott, Watson, Mylan, Gilead Sciences, etc. are all US based companies. There are almost no equivalents in the rest of the world. For example, drug development is almost completely dead in Europe except for the Swiss (Roche), and the lone ~2 remaining UK players.
Same thing goes for medical devices: JNJ, GE, BSX, MDT, STJ, EW, BCR, EK, et al. [Siemens being the main exception.]
As it stands, the rest of the world only pays the variable costs of all the research, drugs, and new products invented in the US after being subsidized by US taxpayers, gov't, and investors, essentially behaving as free-riders.
There are numerous academic studies demonstrating this, as well as the market itself showing how simple it is, for example, to make a profit re-importing the same drug from Canada *back* to the US.
What will be very interesting is the effect of a health care system like the affordable care act on the US. The reason other countries get to free-ride is because the US pays so much. If the US tries to change that then house of cards comes crashing down, and either the quality of medical care will go down all across the board, or the medical costs of the rest of the world will escalate.