The Food and Drug Administration yesterday announced approval of synthetic human insulin, the first health care product made by gene-splicing to become commercially available.

The insulin, to be called Humulin, is expected to be phased into the marketplace later this year by manufacturer Eli Lilly & Co. of Indianapolis, the major producer of insulin from animal organs.

Government approval of a drug developed through the genetic "recombinant DNA" technology represents a major practical payoff for basic biological research that was touted as revolutionary when it was introduced in the mid-1970s.

Approval of the new drug comes four years after California scientists at the City of Hope Hospital and the commercial firm Genentech Inc. announced that they had succeeded in creating synthetic human insulin in the laboratory. Eli Lilly then made an agreement for long-term development of the product.

Dr. Henry Miller, a medical officer with FDA's National Center for Drugs and Biologics, said in an interview that the approval was "significant" because it "demonstrates the scientific and commercial viability of the technology" and "shows that FDA does not intend to place Draconian regulatory impediments in the path of approval of these products."

He said the approval took place in "record time," only five months after it was submitted by the company last May.

Miller said, however, that "the advent of human insulin therapy is not likely to constitute a medical breakthrough for insulin-requiring diabetics."

Diabetes is a complicated disease in which sugar cannot be broken down properly due to a lack of insulin, a pancreatic hormone. The most severely affected victims, about one-third of the 6 million Americans diagnosed as having the disease, are dependent on injections of insulin produced from the pancreases of pigs and cattle. The new genetically produced insulin is identical to that produced by the human body.

Both FDA and Eli Lilly said that tests thus far have not found the synthetic human insulin to have any therapeutic advantage over the most highly purified forms of animal insulin, despite some researchers' claims that the new human insulin would be less likely to produce allergic reactions.

But the production of human insulin by bacteria that can copy it in huge amounts does have the advantage of offering a "virtually limitless supply of products unaffected by circumstances such as shortages of the animal organs used in making insulin," said an FDA spokesman.

Theoretically, the new method should be cheaper in the long run. But an Eli Lilly spokesman said that the human insulin would initially cost about 50 cents a day, a cost comparable with that of highly purified pork insulin. A commonly used beef-and-pork combination form of insulin is cheaper.