Orlistat is a weight reduction medication. Orlistat is the generic name, the trade name of Orlistat as Xenical in most countries and is called Ally or Alli in UK and United States. Orlistat works by stopping 30% of your dietary fat absorption into your body. Instead of the fat being absorbed into the body, it passes out from the other end. And this effect is seen within 24 to 48 hours.