Atypical antipsychotics (AAPs) (also known as second-generation antipsychotics) are the US Food and Drug Administration (FDA) approved medications for schizophrenia, bipolar I disorder, depression and autism. Compared to the typical antipsychotics, AAPs were marketed as reducing adverse side effects such as extrapyramidal symptoms. This resulted in extensive use of AAPs for not only the FDA approved indications but also other conditions that are not approved. However, several post-marketing clinical trials evaluated the use of AAPs and reported serious adverse side effects, including metabolic syndrome, cardiovascular events, or death. The extensive use of AAPs by pediatrics is an important policy problem that imposes serious concerns on public health and economy in the US. A large proportion of total pediatric AAP use is off-label in which the safety and effectiveness are not yet established. Moreover, among the off-label conditions for which AAPs were used, ADHD was the most common primary mental diagnosis. From public health perspective, the risk of type II diabetes in pediatric AAP users was estimated. A retrospective cohort study was conducted and a twice higher risk of developing type II diabetes was estimated for AAP users compared to non-users in pediatrics. From economic efficiency perspective, the cost-effectiveness of AAPs compared to other ADHD medications in pediatric ADHD patients was estimated. Among non-stimulant ADHD medication treatment strategies, AAPs resulted in the lower expected health outcome than other ADHD medications. Also, AAPs were not a favored choice with respect to cost-effectiveness. A comparative effectiveness study that compares resource utilization and costs between atypical antipsychotic (AAP) users and non-AAP users in ADHD revealed that AAP users were likely to visit a healthcare facility for outpatient and inpatient services more frequently than non-AAP users. Total health care costs were significantly higher for AAP users with additional costs of $1,393 (2012 dollars) during six months and $2,784 (2012 dollars) during a year after initiating the AAP treatment.