Well you certainly have quite a friend here. I did note that you put the word friend in quotation marks, and I think that was the right thing to do. I would suggest that perhaps the only approach left is for you to sit him down and simply explain that you would be willing to pay a fee back to his company for any contract items sold if you were part of a vendor group that was allowed to do that. However, you should explain to him, in some detail, that the regulations are such that if you were to do that you could lose your license and most importantly, it would be unethical. Then I would ask the question, “I know you wouldn’t want me to do anything unethical, right?” Of course, then he would say, “right.”
This might sound too simplified, but the truth is, you have to get him to understand that you’re operating on a different playing field than the average vendor. Specifically, there is an issue of ethics and doing the right thing. Once you’ve made it known to him that it isn’t a matter of not wanting to, but it’s really an issue doing the right thing and an ethical issue in the securities industry. It is my hope that he would understand that which it is that you’re communicating with him.
At that point, ask him as a friend and as someone who wants to work with various hospitals that he introduce you to the appropriate individuals there. You might also let him know that by doing this, he could introduce you to these individuals at a breakfast or lunch. This would position him as a value-added partner to them as well.
Specifically, here is an individual who, as President of his company, is saying to his hospital contact that “I would like to introduce you to my friend, John. We don’t have a business relationship together, he isn’t part of my purchasing contract business, nor is there any fees involved with my recommendation to you. I’m simply doing this as a way to bring additional value to you, as the head of this hospital.”The fact that he is willing to bring some value to them without direct benefit to him enhances his position with those individuals. This is a point that you should bring up as well.
So the ammunition that you have is quite clear:

  1. Your ethical foundation
  2. You want to do the right thing
  3. This would bring a value-added position to his relationship at the hospital

All three of which are potent stuff.
Richard