Concerns negotiations between managers of Becton Dickinson's (BD) VACUTAINER division (which manufactures and sells blood collection products) and managers of a large hospital buying group. Recent changes in the health care industry are the background for the negotiations, which involve the buying group's attempt to negotiate both lower prices and different distribution terms with BD. The case provides background information about important industry changes and the previous history of purchasing and negotiations among BD, the buying group, and important distributors. As well as a pricing-negotiations case, it is a good vehicle for raising issues concerning what factors affect the balance of power in channel relations.