Barbara Watson, a 21-year-old Oxon Hill woman who claimed a drug her mother took during pregnancy caused Watson to have cancer 19 years later, will receive $250,000 cash and $30,000 a year for life under a settlement agreement reached yesterday in U.S. District Court.

The agreement between Eli Lilly Company, the drug manufacturer, and Watson, a secretary with the Interstate Commerce Commission, came eight days after a jury trial began over Watson's claim that her mother took diethylstilbestrol (DES) during pregnancy and that the drug caused Watson's vaginal cancer.

Watson filed a $1 million lawsuit against the company shortly after a 1979 operation successfully removed a cancerous growth, according to her attorney, Aaron M. Levine.

Levine said that since 1971, when the Food and Drug Administration banned DES for pregnant women, there have been between 800 and 1,000 lawsuits against about 300 drug companies that manufactured the drug, which was prescribed to prevent miscarriages.

Several studies, disputed by manufacturers, showed the drug caused deformaties in the sexual organs of fetuses, both male and female, Levine said. Levine said about one million women whose mothers took DES have abnormal tissue growths in their reproductive organs. He estimated that about a dozen men also have sued DES manufacturers.

Lawyers for Eli Lilly denied all liability, Levine said, arguing that there was no solid evidence that the DES caused Watson's cancer, that there was insufficient evidence that Eli Lilly manufactured the DES Watson's mother took and that medical evidence 20 years ago did not show any risk of cancer to women taking DES. Lawyers for the company could not be reached for comment.

Levine said the trial here was the fifth in the country against DES manufacturers, although other cases have settled in the past. A manufacturer won a recent trial in Brooklyn, N.Y., lost another in New York and lost two in Chicago and Philadelphia, although those verdicts were set aside and the cases later settled.

Levine said that if Watson has a normal life expectancy of another 50 years, the settlement will be worth about $1.7 million to her. The present-day cash value of the settlement, he estimated, was about $600,000.