An Eli Lilly and Co. vice president at its world headquarters in Indianapolis knew of 29 deaths among overseas users of benoxaprofen, the arthritis drug sold as Oraflex in the United States, before the Food and Drug Administration approved it for sale here on April 19, 1982.

The sworn statement last month of former Lilly vice president Dr. W. Ian H. Shedden, obtained in private lawsuits, along with Lilly documents, provides the first public indication that top Lilly officials in Indianapolis had been informed of the deaths overseas prior to the FDA approval of the drug.

The FDA was not informed of these deaths before approving Oraflex, and the FDA last November charged Lilly with violating agency regulations governing the reporting of adverse reactions from drug use.

Shedden and Lilly said that there was no requirement to report the deaths overseas because they appeared to be an "expected" reaction to a drug of that kind. Additionally, Lilly said that the deaths did not fall under the FDA's reporting requirements because they occurred after the drug was on the market in Europe, rather than in clinical tests.

Lilly halted global benoxaprofen sales last Aug. 4, within hours after it was banned in the United Kingdom by Britain's Committee on Safety of Medicines, the U.K. equivalent of the FDA.

Throughout the year-long controversy over Oraflex, Lilly has not disclosed publicly how and when it learned of deaths associated with benoxaprofen use and when this information was passed on to regulators, saying only that it has complied fully with government regulations in all countries where the drug was marketed.

Now, with Lilly facing at least a dozen lawsuits arising from benoxaprofen use, those questions are being answered in testimony by Shedden, who was responsible for both clinical research and regulatory affairs at Lilly headquarters, and by company documents entered as evidence in private lawsuits.

* Shedden testified that prior to April 19, 1982, when the FDA approved Oraflex, he was informed of 29 deaths among the drug's 750,000 users overseas--25 in the United Kingdom, three in Denmark, and one in West Germany--but did not report the deaths to the FDA until after the FDA had approved it.

* A chronology of benoxaprofen deaths, prepared at the instruction of Lilly's legal department and dated last Oct. 5, stated that two other Lilly headquarters officials, Drs. Harvey A. Barnett of the Regulatory Affairs Division and Louise Levine, knew of at least seven such deaths.

The Oct. 5 chronology lists the dates when each death was first reported to a Lilly affiliate, when and to whom it was reported to someone in Indianapolis, and when the company notified the FDA.

* The chronology shows that Lilly units abroad had been told of 32 deaths that occurred before April 19, 1982, but were not reported to the FDA prior to that date. The total is seven more than the FDA found in an investigation last fall.

* In 25 cases listed in the chronology, Lilly officials in Indianapolis took more than a month to report overseas deaths to the FDA, according to the Oct. 5 chronology. Most of the reports to the FDA were not made until September or October, nearly five months after the release of Oraflex to the U.S. market.

An agency regulation requires the sponsor of an "investigational" medicine--one not yet cleared for commercial sale--to "promptly investigate and report to the FDA any findings associated with use of the drug that may suggest significant hazards . . . and precautions pertinent to the safety of the drug. If the finding is alarming it shall be reported immediately . . . . "

Lilly contends that under its intepretation of FDA regulations, it isn't required to report deaths or adverse drug reactions unless they occur "within clinical studies," according to a Nov. 30 letter from Lilly to the FDA. Deaths among patients using a marketed drug are not "findings" within the meaning of the law, Lilly said.

Attorneys for both sides said the meaning of the FDA regulations will be one of the central issues of the lawsuits.

On June 22, Shedden's deposition was taken under oath by Edward H. Kellogg Jr. of Atlanta. Kellogg represents Clarence Borom, who is suing in behalf of his mother, Lola T. Jones, a Georgian who had been prescribed Oraflex, who was stricken with jaundice, and died in Phenix City, Ala., in July 1982, at the age of 81. The lawsuit is set for trial Nov. 7 in U.S. District Court in Columbus, Ga.

Asked by Kellogg whether he should have reported the European deaths he knew of to the FDA, Shedden said his opinion was and is "that there was no necessity" to do so. "The basis for that opinion is that none of those deaths was unexpected in relation to this class of chemical agent," he testified. He agreed that the "occasional" death of a patient is an "expected event" with Oraflex and every other anti-inflammatory drug of its chemical class. In addition, he said, some of the deaths were "not necessarily drug-related" in addition to having been "expected."

When Shedden was interviewed on The MacNeil-Lehrer report a year ago, he said that the patients in Great Britain who died while receiving the Lilly drug were elderly, were "receiving more Oraflex than they should have been," and were suffering from diseases other than arthritis. "How one can possibly make a comment that the deaths were caused by Oraflex in that complex situation I really can't imagine." And Shedden has testified "it is impossible to establish causality in any of those the United Kingdom deaths."

Shedden, a U.K. citizen, resigned from Lilly to become a research executive for Glaxo, a British drug company, effective June 30.

The Justice Department has referred an FDA request for the convening of an Oraflex investigative grand jury to the U.S. Attorney in Indianapolis, Sarah Evans Barker. She was not available for comment.

The FDA request originated in an inspection of Lilly led by then-FDA medical officer Michael J. Hensley. In a Sept. 29, 1981, memo alleging systematic violations of agency regulations for both investigational and marketed drugs, he asked the FDA to "consider prosecution of appropriate but unspecified Lilly employes."

In several hours of questioning at a May 9 deposition, Barnett, the Lilly former regulatory official, gave only his name and home address. Invoking "my Fifth Amendment privilege" against self-incrimination, he declined to answer all other questions, on advice of his personal counsel.

Hensley's 1981 memo said Barnett stated he had told an aide to withhold reports of certain adverse reactions to Oraflex, had failed to tell the FDA of 65 of 173 such reactions, and "could offer no explanations." One of Barnett's superiors at Lilly has denied under oath that Barnett had intentionally held back such data.

In 1981, well after the drug was on sale in the United Kingdom, a British geriatric specialist, R.C. Hamdy, prescribed it to a group of elderly patients--who are by far the largest group of arthritis victims--to study its effects. Hamdy found that they retain the drug in their bloodstreams about five times longer than do younger persons. Doctors "absolutely" should have been--but were not--warned at once, he said on the BBC "Panorama" television program last January.

"We got in touch with the drug company," Hamdy said, referring to Lilly's U.K. unit. "We made it clear to them that we do not feel that this particular drug ought to be given to elderly patients in the recommended dose because of the risk of side effects . . . . We recommended that the drug be given less frequently." Not until June 1982, a year later, did Lilly advise doctors to halve the dose in elderly patients, thus implementing Hamdy's recommendation.

Hamdy reported his study results in June 1981, at a meeting in Paris, and they were published the following December. Even before the meeting, Shedden testified, he had been "aware of the data." He said that headquarters doctors judged the study flawed, although Lilly had funded it, and said it required more work.

Hamdy did the work, only to confirm that the drug reached higher blood levels in elderly people than in younger people, and was retained longer by the elderly. The results of Hamdy's study and a subsequent Lilly study to double-check Hamdy's work were submitted to the FDA in May 1982, the month following the FDA's approval.

In February 1982, a Lilly representative in Denmark told Shedden that the Danish Board of Health would publish in June--in Danish--a report on the deaths of three benoxaprofen users. Two were said to have died from liver diseases and one from Stevens-Johnson syndrome, in which blisters erupt on the skin and ulcers occur in the mouth and anal and genital areas. Later, Denmark restricted the drug to use by hospital doctors.

Shedden said he learned of 19 of the 29 deaths among U.K. benoxaprofen users at a meeting with Dr. Brian A. Gennery, Lilly's medical director for the United Kingdom, on Feb. 22, 1982--two months before the FDA released Oraflex. Later, Shedden said, he participated in discussions of the deaths with British regulatory officials.

Two of these 19 users died of Stevens-Johnson syndrome, Shedden testified. While these cases were among those that Lilly did not report to the FDA before it released Oraflex, the 1981 West German death which it had promptly reported was also a Stevens-Johnson or similar case, Shedden said.

Five additional U.K. deaths--each of a woman 81 to 88 years old who had been given the drug for two to seven months--occurred in Belfast, Northern Ireland, in a six-month period ended Jan. 26, 1982. All had been patients of Dr. Hugh McA. Taggart of The Queen's University of Belfast. Four of the women had jaundice associated with kidney failure, he said in adverse-reaction report forms supplied by the Lilly-owned Dista Products Ltd.

Taggart, on the "Panorama" program, said that he had "absolutely no doubt" the drug caused the deaths--partly because of "a particularly unique and unusual" form of damage to the liver.

Taggart has told a congressional committee that he had advised Gennery, Lilly's U.K. medical director, about the deaths at a meeting on March 16, 1982.

According to Shedden's testimony at a June 29 deposition this year, Lilly does not consider that its drug caused the deaths reported by Taggart, but based on his findings, it told the FDA that physicians should be advised of the need to consider reduced dosage for elderly patients.

That warning by Lilly was submitted to the FDA in May 1982 and issued to doctors June 17 last year.