Unlike Viagra, which is used to treat male erectile dysfunction by increasing blood flow to the genitals, this drug acts on the woman's brain to enhance mood.
Lead researchers from University of Ottawa -- underwritten by Boehringer Ingelheim Pharmaceuticals -- say the drug is effective in treating a newly coined condition known as hypoactive sexual desire disorder (HSDD) or lack of libido.
"This is a landmark study, and I think it's going to make a great difference for the quality of life for women throughout the world," said Dr. Elaine Jolly, director of the Women's Health Center at Ottawa Hospital in Canada. "This is just the beginning."
The drug acts on the central nervous system, keeping serotonin, norepinephrine and dopamine "in balance," she told ABCNews.com.
The Phase III placebo-controlled studies on flibanserin also raise questions about whether HSDD is a legitimate medical condition or another pharmaceutical company invention to sell drugs.
HSDD was classified as a disorder by the American Psychiatric Association in 2002 and is characterized by low desire, accompanied by "anxiety, guilt and relationships issues," according to Jolly.
"The pharmaceutical industry has come up with Viagra to solve a major concern that men have had since the beginning of time," said June Reinisch, senior research fellow at The Kinsey Institute for Research in Sex, Gender and Reproduction.
"But until now, nobody has seemed that concerned about resolving what women might like."
Reinisch said while the study was "interesting," there were more questions about the data -- women surveyed were 18 to 50, a wide range, and from different countries.
There was also a very strong placebo effect among the women.
"We ladies are complicated, and this study is only looking at one thing," she said. "It may be a first step in something interesting, but to call it a female Viagra, we are getting way ahead of ourselves."
"Women are not interested in getting a hard on, they want to have desire and arousal," said Reinisch, who is also a consultant to New York's Museum of Sex.
The randomized, double-blind study on flibanserin was carried out in Canada's Women's Health Center of the Ottawa Hospital, as well as at University of Virginia, University of North Carolina Chapel Hill and Italy's University of Pavia.
Premenopausal women treated for 24 weeks showed significant improvements in sexual desire and functioning compared with those on a placebo.
The 1,378 study participants were required to be in a "stable, communicative, monogamous, heterosexual" relationship for at least one year.
All exhibited generalized acquired sexual dysfunction disorder or "little or no receptivity" to sexual activity. Those who had secondary problems with arousal or orgasm were excluded from the study, as well as those with psychiatric and depressive disorders or those who had taken medication that might diminish or enhance sexual function within four weeks prior to entering the study.
About 43 percent of women experience sexual problems, according to another Boehringer Ingelheim study that examined their prevalence in a representative sample of 30,000 U.S. women. But only 12 percent found those problems "distressing," according to Dr. Jan Shifren, principal author of the PRESIDE study.
"As almost half the U.S. adult female population reported a sexual problem, sexual concerns should not be 'medicalized,'" she told ABCNews.com. As for those who were bothered by their lack of desire, "this group of women deserves effective treatment."
Many safe and effective options are available for treating women's sexual problems, typically addressing the underlying cause, which can be fatigue, stress, relationship conflict, depression or antidepressant medication.
"If an effective and safe medication is identified, it should be available to women, but given potential risks and side effects, drug therapy always should be considered a last resort," said Shifren, who is director of the Menopause Program in the Massachusetts General Hospital Department of Obstetrics and Gynecology.
"Women in good relationships who are physically and psychologically healthy are generally satisfied with their sex lives -- and you'll never find this in a medicine cabinet," she said.
Because flibanserin is an acting agent and not a hormone, like testosterone, Shifren, said she would want to see the safety data regarding mood effects and possibly blood pressure before prescribing the drug.
Beyond this study, the drug must show clinical improvement for women, effectively decreasing her level of distress about her sexuality, "for it to be effective," she said.
Problems with sexual desire are "a big deal," for women, according to Dr. Marie Savard, medical consultant to ABC News.
"We know the role of sex is so important to relationships," she said. "But for women it's unrealistic to think a pill is going to fix the impact of so many issues that women face."
Women have many reasons for lack of libido: stress, caregiving roles and lack of self-esteem -- " a big one," said Savard, and it's difficult to "label" women with a simple diagnosis like HSSD.
Still, because flibanserin works on the brain, "which is women's biggest sex organ," it might make sense that women would benefit from the drug.
"Unfortunately men's erectile dysfunction is simpler to fix," she said. "give a pill to increase blood flow or the equivalent of an on-off switch.
"Women are turned on by many competing different variable, hormones, timing, stress, sleep, self-esteem, and so our turn on is more like an airplane control panel -- lots of switches interacting to make things go."
Savard said she had "no doubt" the study increased episodes of sexual desire, but women must also side effects, especially because this drug is aimed at younger women.
"Do women really want to have to take a pill every day?" she asked. "It's kind of like treating with a gunshot approach. It's better that women understand what her individual cause is, like self esteem, which is the biggest."
Flibanserin has shown positive effects with a strong safety profile, according to Dr. André T. Guay, director for the Center for Sexual Function at the Lahey Clinic in Boston, who served as a medical consultant on the trials.
The drug works in the brain to modulate serotonin, which is a negative transmitter for sexual function. "Because of that, it seems to increase libido," he told ABCNews.com.
"If we are medicalizing hypoactive sexual disorders, than why treat it?" asked Guay. "A lot of things are a natural part of life -- like cataracts -- but we treat them."
He admits the drug may do little to help women become orgasmic, who, like men, can be affected by obesity and drugs like beta blockers that decrease the flow of blood to the genitals.
"It shouldn't be given like candy to every women coming in with bad feelings about herself," Guay told ABCNews.com.
"It's absolutely not a cure-all, and no one in the company or the advisory board things it's a cure-all for everything, but it can help."