The primary indication for diphtheria antitoxin is in the treatment of suspected or confirmed cases of diphtheria. It is most effective when administered early in the course of the disease, ideally within the first 48 hours of symptom onset. Pediatric patients who present with signs of diphtheria, such as sore throat, fever, and the characteristic grayish membrane on the throat or tonsils, should be evaluated promptly to determine the need for antitoxin therapy.