Government investigators are proposing a wide range of reforms in federal regulation of medicines that, they say, "should result in better health for the American people."

The proposals are in the final report of the Review Panel on New Drug Regulation of Joseph A. Califano Jr. Secretary of Health, Education and Welfare. A reporter obtained a copy of the report, which is to be released at a press conference this afternoon.

HEW created the panel of seven scientists and lawyers in February, 1975, after two Senate subcommittees headed by Sen. Edward M. Kennedy (D-Mass.) subpoenaed 14 current and former employees and consultants of the Food and Drugs Administration's Bureau of Drugs to testify under oath.

The witnesses alleged that the pharmaceutial industry dominated the bureau. And the panel, in an interim report last month agrees that top FDA officials had harassed and humiliated a dozen medical officers and advisers so "to make the agency less adversarial" toward the industry during the Ford and Nixon administrations.

The panel's final report assays the laws as "neither pro- nor anti-industry in its review and approval of new drugs."

The agency's implementation of laws requiring manufacturers to provide substantial premarketing evidence of safety and effectiveness is "fundamentally sound" but needs "substantial improvement," the report says.

Donald Kennedy, who became commissioner of the FDA in April, said yesterday that he has embraced some of the panel's proposed reforms in a draft report expected to reach Califano this week. He declined, however, to disclose his respone to recommendations as to individuals named in the April report.

One of the most dramatic of these recommendations was that Kennedy invite bureau director J. Richard Crout and new-drug evaluation chief Marion Finkel to show cause why whey should not be reprimanded for misleading a hearing examiner in a grievance case brought by Dr. John O. Nestor, one of the bureau scientists who were harassed.

The final panel report includes these conclusions and recommendations:

Contrary to allegations by critics, including Milton Friedman, the Nobel-prize-winning economist, the 1962 law requiring that drugs be shown to be effective is not to blame for the decline in the number of new chemical entities approved by the FDA of for the alleged "drug lag" that has put the United States behind other nations in making therapeutically important new medicines available.

The panel termed it "unclear" whether some new drugs sold abroad are truly significant advances over medicines sold here and added, "Moreover, insufficient weight appears to have given to adverse reactions from drugs which are marketed abroad which are not available here."

The FDA currently can immediately end sales of a drug only if it is ruled an "imminent hazard"; Congress should ease the standard to "substantial risk" of serious harm.

For drugs now being sold, "the most fundamental" need is for a comprehensive system to collect information about their uses and effects.

To remove "undue safety risks" and to assure that manufacturers provide the FDA with neither "fraudulent nor misleading" data, the agency should amend its regulations to prevent companies from staring drug tests in humans until the FDA affirmatively authorizes them.

Congress should empower the FDA to limit drugs of unusual benefit but high toxicity "to certain settings or specially trained physicians.

Congress should put scientific data about new drugs in the public domain, repealing the current adherence to trade secrecy.

TheFDA should restrict communications with the drug industry mainly to written ones, ending the unjustified, "excessive informality" that "fosters the impression of improper industry influence . . . and precludes and adequate record of agency elecision-making.

To improve its scientic capacity, the agency should be given a single campus to replace its widely dispersed facilities and should include on each of its advisory committees "a voting public-interest representative . . ."