Prescription Drug Costs Across the Border?

I am curious as to why it is cheaper to purchase American made prescription drugs from another country, such as Canada or Mexico?

Living near the Canadian border, as I do, I am really surprised at the number of grandparents making the trek, some of them hundreds of miles to fill their prescriptions across the border. Many will stay at a local casino on their trip and claim that there is enough difference in the cost of the drugs that it finances their casino visit and rooms.

So what IS the deal here? Are American pharmacists and drug companies gouging the American public? Are we subsidizing the actual cost of the drugs for other countries?

Furthermore, I am inquiring only about name brand drugs with FDA approval.