Propecia, or Finasteride, is a prescription drug designed by Merck to prevent male pattern baldness of the vertex (top of head) and anterior mid-scalp area. The drug works by inhibiting the production of the intracellular enzyme responsible for the conversion of androgen testosterone into DHT, a process known to cause alopecia (hair loss).
Studies have shown Finasteride to be quite effective in preventing (and even reversing) the effects of male pattern baldness. At the conclusion of clinical trials, five out of every six men kept the amount of hair they had, and two of every three regrew some hair. This seems to suggest that while Propecia can regrow some hair, it is much more effective when used before too much hair has been lost. (So if your maternal grandfather lost all his hair at age 25 and you're 24 and starting to notice a bit too much hair in the comb, it's best to start early than to try to make up for lost time later.) This appears to also be the case with topical alopecia medications, such as Rogaine (Minoxodil).
Despite some people's concerns about sexual side effects (including some former writeups in this node), studies have shown incidences of these to be quite uncommon with Propecia. In clinical studies, approximately 1% of the experimental group suffered mild sexual side effects, with about 1% of the placebo group experiencing those exact same effects. Now, this is not to say that Propecia absolutely cannot cause sexual side effects, but the data seems to suggest that incidence of said effects is quite low.
Pregnant women are encouraged not to take Propecia or handle broken tablets because the testosterone-inhibiting qualities of Finasteride can pass to the fetus, potentially resulting in a particularly awful birth defect.
As a side note, in 2001, the Berkeley Wellness Letter published the results of a clinical trial that showed a daily dose of 0.25mg of Finasteride to be just as effective as the standard 1 mg dose. This is significant because Propecia is rarely covered by health insurance; users of the medication can cut their prescription costs by 75% simply by cutting the pills into quarters.
Propecia is distributed in red, octagonal 1 mg tablets.
1. Abstract: http://www.propecia.com/propecia/cns/home.html
2. Pharmocology: http://www.propecia.com/propecia/cns/pi/clinpharm.html
3. Adverse reactions: http://www.propecia.com/propecia/cns/pi/advreact.html