NOT THE LEAST of the problems with federal regulation is to know when it has outlived its usefulness. The current controversy over the Food and Drug Administration's oversight of the sale of so-called generic drugs-medications comparable to brand-name products, but sold at much lower prices under far less familiar chemical nomenclature-is a case in point. Back in the days when penicillin, tetracycline and other "miracle drugs" were created, manufacturers produced their medication only under patented trade names. Unscrupulous drug companies, seeing that the "miracle drugs" were costly, concocted cheaper medication that claimed to be "just like" those with well-known brand labels. In fact, such drugs were not only lower in price, but also in quality-they were simply bad medicine.

So the Food and Drug Administration moved in with "anti-substitution" regulations to protect consumers from substandard medication. That was a sensible move-back in the 1950s. But now, because of improvements in medical technology and the expiration of a number of drug patents, many of thest "anti-substitution" regulations are outdated. It is now possible for independent drug manufacturers to concoct medications of exactly the same quality as brand-name drugs-but cheaper in price. These generic drugs are available under their chemical names: chlordiazepoxide, for example, might appear on the prescription instead of librium; dextroamphetamine might be stocked by a pharmacist instead of dexedrine. Major drug companies have gotten into the business of manufacturing and marketing these generics, without using any of the promotional gimmicks lavished on brand-name drugs. Even so, they are not at all happy; it is a lot more profitable to produce and market the heavily advertised brand-name products. Or it would be, if the generic drugs could somehow be kept off the market.

And that is precisely what the larger drug companies are now trying to do. The American Pharmaceutical Manufactueres Association recently filed suit against the Department of Health, Education and Welfare to stop the federal government from publishing information that might encourage doctors to prescribe generic drugs or from even assisting state legislators to adopt laws permitting their use. The association argues that a generic drug may be in a form or of a quality that causes it to act less rapidly or effectively than a certain company's brand-name product. Theoretically, that's possible. But the same could be said of all pills and/or capsules made from the same formula; they all react differently, depending on their size, shape, weitht and other characteristics-or whether the medication is in solid or liquid form.

The drug manufacturers' suit glosses over the most important issue: price. Fifteen capsules of a certain brand-name tranquilizer, for example, may be purchased in a drugstore in the District for $10.99. Without the burden of a big advertising campaign and other large-corporation overhead, the same number of its generic equivalent can be bought in the same store for $2.99. Price differentials of that magnitude matter quite a bit for people of limited means with chronic illnesses or conditions that require regular or even occasional medication.

For the reason alone, we would argue that manufacturers should be free to produce safe medication at whatever price the market will bear. Accordingly, we welcome the word that the FDA is considering updating its regulations on generic drugs. As for the drug manufacturers' suit against HEW, we hope it fails. There is every good reason for the government to continue to inform the public about generic drugs-and to encourage their use. To do otherwise would have the effect of running up the cost of health care, in which the government has a rather considerable interest. It would also have the effect of undercutting the struggle against the rising price of just about everything-a struggle in which the government has an even larger stake.