The medication works by blocking or lessening the effects of several chemicals in the brain. Olanzapine (Zyprexa Â®) is a prescription medication that is used to treat schizophrenia and bipolar disorder.When used in combination with fluoxetine (Prozac Â®), it is also approved for treating the following conditions:1  Bipolar depression.ommon side effects of olanzapine include, but are not limited to: 1  Dizziness. 2  Drowsiness. 3  Constipation. 4  Dry mouth (see Zyprexa and Dry Mouth). 5  Weight gain (see Zyprexa and Weight Gain). 6  Difficulty sleeping (insomnia) (see Zyprexa and Insomnia) .