Xanax is Used for Anxiety Panic disorder. It is a class of drugs and is called benzodiazepines.It calms your nervous system. works by lessening abnormal excitement in the brain and the effects of certain natural chemicals in the body. Not taking it more time may cause serious side effects including depressed mood, confusion, and agitation. Xanax is available in 1mg,2mg,3mg, and 0.5mg.