The number of American children diagnosed with bipolar disorder jumped 40-fold from 1994 to 2003, according to a study in the Archives of General Psychiatry (here’s the abstract).

By 2003, the diagnosis was applied to 1 in 100 kids, researchers found. Of the 800,000 people ages 19 and younger with the diagnosis, 91 percent were treated with at least one drug and two-thirds with two or more, Bloomberg News reports. Adult diagnoses almost doubled to 1,069 for each 100,000 people, and the rate among kids reached 1,003.

Drugs used to treat the disorder, including Johnson & Johnson’s top-selling Risperdal, are linked to side effects including weight gain and diabetes, the researchers said. Patients treated for a condition they don’t have won’t respond to the treatment and can end up being prescribed multiple medications.

“They’re likely to get more side effects than benefit,” says Gary Sachs, director of the bipolar and mood disorders program at Massachusetts General Hospital in Boston, who wasn’t involved with the study. “There’s no question that there is misdiagnosis going on. You can dispute whether it’s under- or over-diagnosis.”

The study was drawn from an annual government survey of doctors. The expanded use of bipolar as a pediatric diagnosis has made children the fastest-growing part of the $11.5 billion U.S. market for antipsychotic drugs. J&J won FDA approval last month to market Risperdal for use in children ages 10 and older. Lilly and Bristol-Myers Squibb are seeking similar clearance.

In the mid-1990s, some psychiatrists began arguing the disorder looks different in children, who may alternate more rapidly between depression and mania. In their view, the key sign of a bipolar child is a high level of irritability and rage. The condition, like attention deficit hyperactivity disorder, has been linked to poor school performance and substance abuse.

A third to half of patients referred to the Massachusetts General clinic with a diagnosis of bipolar disorder turn out not to have a confirmable case, Sachs says, adding that his “personal belief is that the true rates of bipolar disorder” in children may be as much as twice the number in the study.

Even with side effects, the med can be effective in treating patients who truly have bipolar disorder, Sachs continues. Treating kids is “the compassionate thing to do when you see a child suffering, or out of control,” he said.

When children are misdiagnosed, the result can be dangerous, says Mark Olfson, a Columbia University psychiatrist who led the study. There are several factors that make him question the reliability of many bipolar diagnoses, he notes - the disorder in adults is seen mostly in women, yet about two-thirds of diagnosed children are boys. And many children said to have bipolar were also diagnosed with attention deficit disorder, a condition that can look similar.

“If we’re getting this wrong, if substantial numbers of kids are being misdiagnosed with bipolar disorder, it can have serious consequences,” Olfson told Bloomberg in an Aug. 31 telephone interview.

Two groups of medications are widely used to treat bipolar disorder in children. Anticonvulsants, developed to treat epileptic seizures, were taken by about half of the children. Drugs in this group include Depakote made by Abbott Labs; J&J’s Topomax; Glaxo’s Lamictal; Novartis’ Tegretol and Pfizer’s Lyrica and Neurontin. Side effects include sedation, weight gain, tremor, and, more rarely, liver and blood problems.

None are approved by the FDA for treating children with bipolar disorder. Almost half the children took atypical antipsychotics, such as J&J’s Risperdal, Lilly’s Zyprexa, AstraZeneca’s Seroquel, Bristol-Myers’s Abilify and Pfizer’s Geodon. Side effects linked to this group of medications include weight gain, diabetes and hormonal irregularities.

Lilly is also developing an experimental antipsychotic drug that didn’t show the same side effects in the second stage of testing normally required for regulatory clearance, the drugmaker announced yesterday. That drug targets a different brain chemical than drugs now on the market.

Vivek Kusumakar, global head of Risperdal development for J&J, told Bloomberg that when it was approved, the side effects must be weighed against the potentially fatal conditions the drug treats.

David Healy, a professor of psychological medicine at Cardiff University in Wales, says the rise in the diagnosis was unprecedented. Healy, who has served as an expert witness for lawyers suing drug companies, is concerned that so many children were prescribed more than one drug. “The mismatch between possible benefits and likely harms is great,” he says.