Three months before Eli Lilly & Co. won government approval to sell Oraflex in the United States, a British subsidiary of Lilly's reported its eighth Oraflex-related death to British health authorities.

The Food and Drug Administration was not informed of any fatalities before allowing Lilly to market the arthritis medicine as of April 19, according to FDA Commissioner Arthur Hull Hayes Jr. Hayes said he is "carefully reviewing" the facts to see if Lilly has violated any FDA regulations. The regulations require a manufacturer to seek and report all pertinent safety and effectiveness information about a drug awaiting marketing approval, including information derived from sales outside the United States. According to Rep. L.H. Fountain (D-N.C.), whose House Government Operations subcommittee monitors the FDA, the law "allows criminal penalties to be imposed where such information has been deliberately withheld."

It is not known when Lilly learned of the deaths from its British subsidiary, Dista Products Ltd., which marketed the medicine under the name Opren from October, 1980, until early last month.

A Lilly spokesman at the Indianapolis headquarters said, "Lilly policy is to comply fully with all requirements of the law and FDA regulations regarding the reporting of adverse reactions to the FDA. Beyond that, we believe it would be inappropriate to comment on this matter."

Lilly pulled the drug off the market in early August.

Lilly began selling Oraflex in the United States May 10. In the first three weeks physicians wrote 64,000 Oraflex prescriptions, a reported 4.5 percent of all new anti-arthritis prescriptions. The Oraflex share climbed to 11 percent in June.

The first public knowledge of fatalities came in May and early June when the British Medical Journal reported 12 United Kingdom Oraflex-related deaths but did not specify when they occurred.

At that time, the FDA had before it a nine-month-old staff recommendation for possible criminal prosecution of unnamed Lilly officials for allegedly failing to report "important adverse findings" about Oraflex and three other marketed or experimental drugs. The FDA says the recommendation, made by former medical officer Michael J. Hensley after a two-year investigation, is still pending.

By August, reports of deaths raised the U.K. fatality toll to 61 among about 500,000 users. The British Committee on Safety of Medicines banned the drug on Aug. 4, and before the day was out Lilly halted sales worldwide.

Fountain held a two-day hearing in early August in which he severely faulted FDA enforcement of the rules on reporting of adverse drug reactions.

Later in August, Fountain learned from the British committee that Dista reported the eight deaths between May, 1981, and January, 1982--three months before the FDA approved Oraflex. Fountain also learned what the committee said were the "primary adverse reactions" associated with them: blood diseases (two cases); kidney disease (two cases); liver failure, and gastrointestinal bleeding or ulcers (three cases).

The committee said it was unable to determine whether three victims had both kidney and liver diseases. These diseases and gastrointestinal bleeding or ulcers, involved in six of the eight fatalities, were "the very side effects which apparently led Lilly last month to suspend further sales of Oraflex," Fountain said.

Fountain expressed "doubt that FDA would have approved Oraflex if it had known of the eight deaths . . . or the much larger number of deaths reported by British physicians."