What type of demand exists for pharmaceutical and medical device products? Discuss the roles doctors play in the business buying process for medical equipment used in a hospital and why companies market so heavily to them.

Pharmaceutical companies give physicians money and other promotional benefits when marketing their products; some receive hundreds of thousands of dollars. J&J, Pfizer, GSK, and other drug manufacturers are now disclosing payments to physicians, medical centers, and academic institutions. In the second half of 2009, Pfizer paid $35 million to 4,500 doctors and academic medical centers, and GSK reported paying $14.6 in the second quarter of 2009. In total, the drug industry spends about $20 billion per year marketing to health professionals. These payments are in the form of gifts, food, trips, speaking fees, drug samples, and educational programs. The companies are providing this information voluntarily now. However, because of the “sunshine provisions” of the Health Care Reform Act, pharmaceutical companies will be required by law beginning in 2013 to publicly disclose cumulative payments to health-care providers totaling $100 or more per year.