When a new prescription drug was introduced last year to treat the epidemic venereal disease genital herpes, Peoples Drug Stores took an extraordinary step that has touched off fierce debate in the pharmaceutical industry.

Peoples bought full page ads for the new medication, Zovirax, telling herpes victims that the Food and Drug Administration had approved use of the ointment to treat their recurrent outbreaks of herpes sores.

For long-suffering herpes victims facing frequent flareups of an incurable disease that most people are too embarrassed to talk about, the availability of a new treatment was encouraging news.

But to some drug regulators, advertising any prescription medicine is like crying herpes in a crowded hot tub--a violation of the limits of free expression.

Since it was published last spring, the Peoples ad for Zovirax has become one of three prime examples cited in the growing controversy over prescription drug advertising. Also entangled in the debate are a Merck Sharp & Dohme ad in Reader's Digest urging the elderly to ask their doctor about Pneumovax, a vaccine against bacterial pneumonia and a $1.50 rebate on the anti-arthritis drug Rufen offered by its maker, Boots Pharmaceuticals Inc.

Peoples did not set out to challenge the long tradition of not advertising prescription drugs directly to customers, says Joseph A. Pollard, vice president for advertising and public relations.

"We think we did something that was a service to our customers," said Pollard. "It wasn't like advertising pharmaceuticals, we don't really approve of doing that ourselves."

Pollard said Peoples decided Zovirax ought to be advertised because it was an unusual drug for an unusual ailment. "It's a topical drug (a substance applied to the skin) rather than one that's injested," he explained. It has neither dangerous side effects nor potential for abuse (no one's going to use herpes cream to get high) and "it relieves the persistent discomfort" caused by a disease thought to afflict 20 million Americans.

Peoples wasn't trying to tell doctors how to treat herpes--"that's a matter for the patient and the physician," says Pollard--nor was it seeking to boost sales of Zovirax. "I don't think we sold enough to pay for the ad," he added.

Peoples checked with FDA officials and got an off-the-record assurance that running the ad would not bring food and drug authorities down on their head, Pollard added.

The FDA's attitude toward prescription-drug advertising reflects the anti-regulation policies of the Reagan administration, but within the pharmaceutical business the issue is far more complex than the black and white question of whether regulation is good or bad.

On the other side of the dispute is Jere E. Goyan, who was FDA commissioner in the Carter administration.

"I was appalled to learn that People's Drugs placed ads in The Washington Post for the new drug that has some effect on herpes," Goyan said in an interview with Post reporter Morton Mintz. "I think it was an unconscionable thing for them to do."

Goyan argues that Peoples' ad for Zovirax "had to lead to many patients putting pressure on their physician to prescribe this particular drug for that particular disease state, and we really are way too early to be using large amounts of that drug."

"I believe in making the information available to patients at the moment of need," the former FDA head explained. "I don't think we should try and promote the use of drugs. We use too many drugs in this country right now."

"I think it's a bad practice and I'm disappointed that we're moving in that direction," said Goyan, who acknowledges that other FDA officials--past and present--disagree with him.

Nancy L. Buc, who was FDA's chief counsel when Goyan was commissioner, contends that direct promotions of drugs to consumers should not be restricted by the law "so long as they are truthful." The issue of what is "truthful" and what is the "whole truth" about the side effects and risks of drugs that are advertised remains a major stumbling block.

Goyan's successor as FDA commissioner, Arthur Hull Hayes Jr., has supported the idea of consumer education through drug advertising, but had not endorsed the concept of unrestricted direct advertising of prescription drugs. The trade publication Medical Advertising News suggested recently the FDA "is likely to butt heads with several drug companies in the next year" over prescription advertising.

The Peoples ad for Zovirax is still regarded as a "special case" and not the experiment that proves consumer advertising of prescription drugs is a worthy idea.

But as the debate over drug advertising continues, Peoples pioneering herpes ad will remain one of the landmark cases. It is another example, as well, of how Washington's private industries can influence policy discussions that affect the whole nation.

An apology to the Committee to Save Rhodes Tavern for a mistake I made last week. I said they want to save and restore the F Street structure because of its architectural significance. But the Rhodes Tavern folks say they've never contended the building has architectural merit. They say Rhodes Tavern ought to be preserved because of its historical significance.