The Health and Human Services Department yesterday proposed a major overhaul of the government's approval system to speed up the process of getting new drugs on the market.

HHS Secretary Richard S. Schweiker, in a speech to an industry trade group, said the changes will help close the "drug lag" while "continuing to assure drug safety and effectiveness for the public."

He called the plan the "most significant revision" of the Food and Drug Administration's new drug approval regulations in 20 years. It is still tentative, however, and must be approved by the Office of Management and Budget before it is officially proposed in the Federal Register.

The HHS proposal would seek to:

* Reduce the required paper work for new drug proposals by as much as 70 percent, cutting out case reports on individual patients participating in drug trials and requiring summaries instead.

* Cut the review times for all drugs by as much as 20 percent on the average. The reduction would have the greatest effect on new drugs that are similar to those already on the market, and would be less for significant new drugs that are already moving on a FDA fast-track system.

* Streamline the format of applications to allow several FDA reviewers to work on a drug at the same time.

* Allow drug approval to be based solely on studies from foreign countries.

* Institute a new appeals process to resolve disputes between manufacturers and FDA scientists.

* Strengthen adverse-effects reporting once a drug is marketed.

Many of the changes were included in a recent report from a congressional commission that studied the "drug lag" problem. An FDA effort to review the approval process was initiated in the Carter administration, although Schweiker's speech did not mention this.

Yesterday's announcement focused solely on the final stage of drug development, new drug approval for marketing. It did not deal with the early research or investigational new drug stage, but Schweiker promised that would be ready later this year.