What is Finasteride? Can it prevent hair loss?

Finasteride (brand names Proscar and Propecia by Merck, among other generic names) is a synthetic drug for the treatment of benign prostatic hyperplasia (BPH) and male pattern baldness (MPB). It is a type II 5a-reductase inhibitor. Finasteride binds to the enzyme and prevents endogenous substrates such as testosterone from being metabolized. By inhibiting 5α-reductase, finasteride prevents conversion of testosterone to DHT by the type II isoenzyme, resulting in a decrease in serum DHT levels by about 65–70% and in prostate DHT levels by up to 85–90%.

Source: Wikipedia (summarized).