Physicians prescribe Xanax to treat anxiety, panic attacks, and anxiety with depression. Doctors classify it as an extremely potent type of medicine called a benzodiazepine. Xanax achieves its effects through amplifying the action of a brain chemical known as GABA, a brain chemical that works to quiet the brain. It quietens you, reduces your anxiety, and promotes sleeping. This drug is also prescribed for anxiety attacks, short-term application in acute stress.