Export control: a brush with illness and an entrepreneurial drive combined to lead Michelle Wilson to complete head to head with international drug firms. (Small Business).

BOTH opportunity and necessity drove Michelle Wilson into the drug business.

An actress and model who worked as an independent contractor, Wilson found herself unable to get health insurance after her brother died at 27 of an undiagnosed heart condition and she was found to have the same ailment.

"I had $600 a month in medications," said Wilson, who remembered calling around town for the cheapest drug prices.

She eventually got a job with the government that provided health coverage, but the experience led her to form La Femme International Inc., a manufacturer and distributor of pharmaceuticals, medical supplies and textiles to several African and South American countries.

Wilson, who said she neared bankruptcy as her medical bills piled up, set about building a business selling generic drugs to poorer countries with rampant cases of heart disease, diabetes and HIV.

So far, she has inked deals with the governments of Kenya, Tanzania, Uganda, Cameroon, Nigeria, Nicaragua and Panama, among others. She expects to generate $1.2 million in revenues this year and $5 million next year.

Operating the five-person business on a shoestring from her Woodland Hills town home, Wilson buys raw materials from chemical laboratories in Canada and El Salvador, then contracts out manufacturing and packaging to pharmaceutical maker R.P. Alcocer S.A. in Mexico. LFI is incorporated in both Mexico and the United States.

The governments issue bids for a contract and then select the distributors. (Wilson said she is paid either by the government with which she contracts or by distributors.) Included in her contracts is a clause that presumably restricts the government, distributor or retailer to mark up prices beyond market price.

Governments generally pay 50 to 60 percent up front, with the balance coming after the drugs are shipped to the country. Distributors typically issue a guarantee that they will pay her once the government pays them.

LFI manufactures more than 120 medications and distributes hundreds of others. She sells drugs--including generic versions of Prozac and AZT, among others--a line of vitamins, anti-bacterial soap, medical supplies like syringes and textiles for hospital gowns. She said her drugs sell for one-third that of the major drug companies.

Start-up spirit

The foray into pharmaceuticals is the latest turn for the serial entrepreneur.

While acting and modeling in the early 1990s, she got her start in international trade when she invested in a friend's oil filter manufacturing business in the Philippines. Later, she ran a comic book store in North Hollywood and had her own recording studio.

After suffering respiratory failure related to a heart condition in 1997, her priorities changed. A doctor warned Wilson, now 35, against remaining underweight for her acting career. Meanwhile, her medical bills started to add up.

"Everything happened so fast," she said. "I started doing my own homework on diseases, on the medications I was taking. I started to think, 'Can I get a wholesale license to sell this?"'

In late 1997, Wilson took a contract job working for the Census Bureau as part of the 2000 count so she could get medical insurance, she said. But she already had a plan for EFI.

An avid market player during the dot-corn heyday, Wilson said she ploughed $200,000 of her own savings into starting LFI, borrowing another $125,000 in cash and credit from a pathologist who is a shareholder and works at the company. She has also received $100,000 in financing from the Export-Import Bank of the United States.

"Michelle is a go-getter," said Rachid Sayouty, director of the L.A. export assistance center at the U.S. Department of Commerce, which awarded Wilson an export achievement certificate earlier this year to recognize how she used the Department's services to export textiles to Kenya.

Barries abound

"The market is very small," said Ian Killips, director of marketing for AIDS Healthcare Foundation in L.A. "If you have HIV or AIDS in Africa, you might be able to pay for medications if you are one of the fortunate few with a good job. You could also get treatment if you work for a large corporation, like Chrysler in South Africa. Typically, unless you fall under those circumstances, you can't afford it."

Killips said the per-capita income for many Africans is $400 a year, and that AIDS or HIV medications can run up to $5,000 a year.

Medications must be registered with the foreign countries in which she intends to sell them to, and the costs of registration can be great. In Panama, registration costs are $200 per medication, Wilson said. Then she must pay for a quality analysis report to verify the chemicals and make-up of the medication, which can run $750 to $1,000 per report.

Besides cost, LFI faces competition from giant drug manufacturers, such as GlaxoSmithKline and Bristol-Myers Squibb Co., which have reduced prices in the past year under pressure from African governments. Some now sell HIV drugs for as little as $1 a pill.

But Wilson said those prices are anomalies. She sells many of the anti-HIV drugs for less than $2 a pill, compared to $5$8 among her competitors sell, she said.

RELATED ARTICLE: PROFILE

La Femme International Inc.

Year Founded: 2000

Core Business: Manufacture and export of pharmaceuticals

Revenues in 2001: $200,000

Revenues in 2002 (projected): $1.2 million

Employees in 2001: 4

Employees in 2002: 5

Goal: To bring affordable medications to the U.S. market within the next three to five years.

Driving Force: The need for medication underserved communities.