Eli Lilly, the pharmaceutical company that withdrew its controversial anti-arthritis drug Oraflex last month because of doubts about its safety, has been ordered to correct "false and misleading information" issued to the press when the drug was launched in May.

In a letter sent to the company's president and chairman, Richard Wood, the Food and Drug Administration says Eli Lilly made exaggerated claims for its product, including the unsubstantiated announcement that it could halt the progression of the "cellular aspects" of the disease.

The drug received widespread publicity when it was introduced in May, and an estimated half million Americans took Oraflex during the 11 weeks it was available. A similar number of people have taken the drug in Great Britain, where it had been available 18 months earlier.

Oraflex was suspended from sale in Britain after 61 fatalities were linked to its use. In the United States, the FDA is investigating 11 deaths so far among Oraflex users.

The FDA's criticism of Lilly's marketing of its new drug was based on the company's claim that it could prevent the disease of arthritis from getting worse.

The claim was made in a three-page brochure included in a widely distributed press kit that was the basis for reports in newpapers and on television and radio. The claim was also made on an "arthritis hotline" installed by Lilly at its headquarters in Indianapolis.

Jerome Halperin, acting director of the FDA's Office of Drugs at the National Center for Drugs and Biologics, stated in the letter that the claim "falsely suggests a beneficial effect of Oraflex on 'cellular aspects' of the disease." Halperin wrote that the press kit did not mention that the observations had been seen only in laboratory tests and not in animals or humans.

FDA officials studied tapes of television coverage and found the same message reflected throughout. For example, ABC World News Tonight immediately reported: "While there is still no cure, there is a new drug on the market which not only reduces the pain of arthritis but may actually stop the progress of the disease."

The misleading information, the FDA letter stated, had been achieved by "careful wording, selective emphasis, inappropriate use of headlines and minimization of adverse information about the drug."

FDA correspondence now made public shows that Pfizer, the manufacturer of Feldene, the only rival drug to Oraflex, also was reprimanded by the FDA for what the agency described as an alleged attempt to mislead the press and public. "Statements concerning Feldene's effects on white cell migration or the . . . reduction of 'rheumatoid factor' all imply some action on the underlying disease mechanism," Kenneth Feather of the agency's drug advertising regulation division told Pfizer Vice President Joseph Aterno in a letter dated July 13.

"This is misleading," Feather wrote. "There is no evidence" that these drugs "have any beneficial effect on the underlying disease process, either slowing it, stopping it, or reversing it." Unlike Lilly, Pfizer was not ordered to reissue information to the press to correct the earlier material.

Nevertheless, when contacted last week for comment on some of the FDA criticisms of the company, a Pfizer spokesman reiterated the claims by referring to a speech made by one of its medical directors, John Jefferis, at the Pan-American Congress of Rheumatology held in Washington in June.

The data, Jefferis had said, was "very encouraging" and it was possible that "Feldene may ultimately be found to interfere with the progression of the disease." He then qualified his remark by adding that no drug currently available had been proven to interfere with the disease in humans.

Neither Eli Lilly nor Pfizer would disclose their sales or profits from these drugs, which are the only once-a-day drugs for arthritis treatment on the market. However, a trade publication estimated Pfizer would make between $250 million and $300 million in its first year selling Feldene. The estimate was made before Oraflex was taken off the market. A spokesman would not comment on this figure yesterday.

Pfizer was also criticized for an advertisement in which it claimed that Feldene was "unsurpassed by aspirin." At a House Government Operations Committee hearing two weeks ago, FDA officials conceded that the clinical trials on which the approval of the drug had been based had been "marginal." Large numbers of patients in all major studies of the drug also took aspirin, a long-established anti-arthritis drug.

FDA officials said its reviewers had been evenly divided on whether to approve the drug or not. They said that "unsurpassed" was technically true in that Feldene had been shown to be no worse than, but also no better than aspirin.

Fred McDuffie, medical director of the Arthritis Foundation, said, "I think it's a poor policy to tout prescription drugs to patients," adding, "It has the patient going to physicians saying 'I want this or I want that,' which may or may not be appropriate."

He said the only advantage of Oraflex appeared to be that it could be taken once a day and that some patients apparently felt relief when other drugs did not work.

Lilly has cushioned the economic blow caused by the suspension of sales by offering the country's 50,000 pharmacists other products in exchange rather than cash refunds for their unused stocks of the drug.A Lilly spokesman said, however, that individual pharmacists could request cash refunds.