The Globe and Mail (Canada) published an article discussing the use of antipsychotic drugs in elderly dementia patients. Two studies, one published in the New England Journal of Medicine and another published in the Canadian Medical Association Journal, point out that there is a higher death rate among seniors with dementia taking antipsychotic medicines. The rate using atypical antipsychotic treatments (risperidone, quetiapine, olanzapine) was 1.6 times greater than patients taking a placebo. The rate using older antipsychotic treatments (chlorpromazine, haloperidol, loxapine) is even worse. In terms of rate per thousand people taking the meds, it might be expressed as 140 persons/thousand with the older drugs, and 96 persons/thousand with the atypical antipsychotic drugs.
No discussion of efficacy was included in the Globe and Mail article, and the cause of these extra deaths is unknown but may be attributable to several things, including "heart-related conditions, impact on blood pressure and swallowing problems."
The overall death rate for persons 65 and older from all causes is 223.06/thousand in the US.
The difference in the mortality rate due to the drug, is only one part of the equation. The other, very important part, is how well the drugs work on an individual basis and whether or not the people taking or administering the drug feel that it's the best choice for the patient's quality of life. According to American Family Physician (a peer reviewed journal of the American Academy of Family Physicians), using these drugs is pretty standard treatment for dementia caused by several different diseases, including Alzheimer's disease and Parkinson's disease. Evidence suggests they are effective, if applied judiciously.
So, the bottom line is: if there aren't any better treatments, is it wrong to give a treatment that has reasonable efficacy but a small potential increase in death rates? Tricky, tricky. Since you frequently can't ask the patient under these circumstances, it would be up to the family in conjunction with the physician to determine just how worth the risk it is. Dementia is pretty debilitating, painful for the patient and pure hell for the family who watches their loved one deteriorate.