Xanax Is Used To Treat Anxiety and Panic disorder. Xanax is a class of drug. It is called benzodiazepines. It works by the effects of certain natural chemicals in the body. It calms down your nervous system. Take this medicine by mouth and do not take it more time. It causes side effects including: depressed mood, confusion, and agitation. Xanax is available in 1mg,2mg,3mg, 0.5mg, and o.25mg.