To hear the presidential candidates tell it, you would think expensive medicine was the biggest problem facing America today. At nearly every campaign rally, President Bush touts his new Medicare bill with its drug-discount program for seniors. John Kerry, meanwhile, says he is "choosing seniors over pharmaceutical profits."

Both candidates could use a reality check.

The fact is Americans as a whole spend on average $487 a year on pharmaceuticals. That's less than they spend on fees and admission to entertainment events. Seniors spend 3 percent of their income on drugs, less than what they spend on entertainment alone.

Drug costs are not "spiraling," as some politicians would have us believe. In 1960, Americans spent 10 percent of their health-care dollars on pharmaceuticals, which is roughly the same portion they spend today.

Moreover, when drug costs go up for certain individuals, it often represents an overall savings, because advanced drugs frequently replace more expensive and invasive procedures. For example, in a year-long study of congestive heart patients in a new treatment program, Humana Hospitals found that pharmacy costs increased by 60 percent. The medications, though, reduced hospital costs by 78 percent, resulting in a savings of $9.3 million.

What we need are politicians who will tell Americans hard truths: Our population is aging. Our energetic drug industry continuously comes up with innovative and life-saving medicines. But unlike the many affordable generics and established drugs, the new wonder-pills don't come cheap. In fact, due to the high cost of research and development, it takes an average of $800 million to produce a single new drug.

If pharmaceutical companies are not allowed to recoup these R&D costs, they will have no incentive to develop the remedies that will fight deadly diseases such as cancer and AIDS. A drug like Lipitor, which saves people from heart disease, would never have been invented.

This brings us to another hard truth the politicians are unwilling to tell: The reason the United States produces more new disease treatments than any other country in the world is not because Americans are more noble or altruistic. It's because we allow our pharmaceutical companies to make a profit.

John Kerry says the solution to this "problem" is to allow the reimportation of U.S.-made drugs back to the United States from Canada, where he says they are "cheaper." This is pure sleight-of-hand.

It's true that some U.S.-made drugs cost consumers less abroad. That's because governments like Canada's set the price of drugs for Canadian patients though a system of price controls. In return, the governments demand discounts from the pharmaceutical firms. The firms don't have much choice, because the governments threaten to steal drug patents if they can't wrangle the discounts they want.

The Canadian market is relatively small ($14 billion). But if we opened the reimportation floodgates into the more than 10-times-larger U.S. market, we would effectively import Canadian price controls too. That means we would destroy our pharmaceutical companies' profit motive, and they would stop conjuring up new cures.

Instead of listening to John Kerry's economic voodoo, the United States should use trade policy and diplomatic pressure to urge other wealthy nations to do two things: loosen price controls on medicines, and make sure patent law is enforced.

The United States has successfully used trade negotiations to open foreign markets to U.S. goods and to urge the enforcement of intellectual property rights. There's no reason the same kind of pressure can't be used to protect U.S. drug companies from patent theft.

And if drug prices in other wealthy nations were allowed to settle at a point determined by the market, rather than the government, the price of drugs in the United States would likely come down too.

That's because, with many nations still operating closed, price-controlled pharmaceutical markets, consumers in the only free market - the United States - end up paying higher prices than they would in a single, competitive larger marketplace.

Canadians would also benefit if their government lifted price controls. Right now, their government decides which drugs the entire population will have access to. That means that if a Canadian doctor wants to prescribe a new medicine - perhaps after similar ones have failed to help - he often has to send an ailing patient on a shopping trip across the border.

The small group of low-income Americans for whom high drug prices are a burden should take advantage of the numerous markdowns available, such as the one in Bush's Medicare bill. Also, the pharmaceutical companies themselves offer concessions based on income, ranging from a free month's prescription to an ongoing 25 percent discount.

And instead of pandering, our politicians should give us some straight talk about the real costs of drugs. Some of the latest medicines work magic. No amount of smoke and mirrors, though, is suddenly going to make them free.