(FORTUNE Magazine) – Eli Lilly's flagging sales of Prozac could receive an un-expected boost this year. Anti-depressants, those wonder drugs of the '80s and '90s, are increasingly under attack amid questions about the possible dangers they pose to adolescents and children. In the U.S., Prozac is the only anti-depressant that's proved safe enough to prescribe to kids, according to the FDA. In fact, a recent government-funded study found that Prozac helps teenagers overcome depression better than talk therapy.

Earlier this month, New York State Attorney General Eliot Spitzer filed suit against GlaxoSmithKline, charging fraud on two counts: first, that the British drug maker promoted Paxil for unapproved use in treating depressed children; and second, that in doing so, the company concealed internal studies that suggest Paxil is unsafe for young patients. Spitzer's action is hardly trendsetting. Earlier this year, the FDA concluded that depression drugs require stronger warnings, specifically as they relate to suicide. The notion that some antidepressants contribute to suicidal behavior has been a longstanding concern in the medical community, but clinicians have never been able to establish a definite link. Even so, last winter the British government banned the use of anti-depressants to treat youngsters.

The legal and regulatory assault on anti-depressants comes at a bad time for drugmakers. Across the industry, research and development have become more expensive and less productive, so companies are trying to expand markets for their existing drugs. Since its approval in the mid-1990s, for instance, Glaxo's Paxil has gained FDA approval for use in treating not just depression, but social anxiety disorder, panic disorder, and premenstrual dysphoric disorder. When the FDA fails to approve a drug for expanded uses, drug companies sometimes try to nudge doctors into using certain medicines for unapproved patient populations or nonsanctioned ailments. That practice, known as "off-label marketing," is illegal. What makes that marketing law difficult to enforce is that doctors, using their discretion, are allowed to prescribe a drug off-label as long as they believe it benefits patients.

According to Spitzer's suit, Glaxo, beginning in 1998, encouraged doctors to use Paxil to treat depressed children even though the drug is approved only for adults. In 2002, Glaxo garnered some $55 million in prescription sales of Paxil for children and adolescents, 4% of Paxil's $1.5 billion in U.S. sales. Spitzer's investigation, which is still underway, has uncovered some damning documents. The most critical of them all, so far, is an internal memo showing that Glaxo attempted to "manage the dissemination of data in order to minimize any potential negative commercial impact."

Spitzer's suit seeks to make Glaxo disgorge all profits from selling Paxil to children. The company claims it has never marketed Paxil for children. As for the charge that its research department withheld negative information, spokesperson Mary Anne Rhyne says that "studies regarding Paxil's use among children have been made public in medical journals and at more than 25 presentations at major medical meetings. They were given to the FDA and other regulatory agencies. We acted responsibly." As for the incriminating 1998 memo, Rhyne insists that "it doesn't represent the company's position."