Answer: Mefloquine is an older generation anti-malarial drug that can produce vivid nightmares, anxiety, and hallucinations.
Mefloquine, also called Lariam, is a drug that was developed in the 1970s by the United States Army. It is a prescription-only medication that is effective at decreasing the likelihood that a person contracts malaria when they are exposed to the disease. It is also used as a treatment (Psychiatric Side Effects of Mefloquine: Applications to Forensic Psychiatry)
Mefloquine or Lariam exposure is sometimes not well tolerated, as the side effects tend to include psychiatric disturbances. The best known side effects of the drug includes visual hallucinations and extremely vivid nightmares.
Mefloquine is also known to produce anxiety or depression-like symptoms. Some patients who experience these side effects report that even years after discontinuing use of the drug. Some report suicidal ideation as well.
The mood dysregulation and visual hallucinations point to an effect of mefloquine on the serotonin signaling systems in the brain, but the exact mechanism is unknown. Many believe that electrical communication in limbic system brain structures is affected by mefloquine, which explains some of the symptoms including anterograde amnesia.