Drugs that cure one ailment but eventually cause cancer are generally frowned upon by the public, especially if the drug is curing something as mundane as baldness.

Research in 2003 on finasteride, the active component of Merck's (NYSE:MRK) Propecia, indicated that in addition to regrowing hair, the drug reduced the prostate cancer risk in men by 25%. That good news was coupled with bad news -- tumors that were found were slightly more likely to be aggressive. Researchers worried that the drug was causing tumors already present in the patient to advance more quickly.

Instead, two more recent studies being published in the Journal of the National Cancer Institute demonstrate that the drug shrinks the prostate, allowing doctors to find the aggressive tumors that might have otherwise gone unnoticed.

The research wasn't done by Merck, so it's not clear whether Merck would try to increase the labeling indications for its finasteride to include cancer prevention. Merck markets a higher concentration of the drug under the brand name Proscar for the treatment of benign prostatic hyperplasia in men with enlarged prostates. Proscar had sales of $619 million last year; just imagine the potential sales, should the drug gain widened acceptance as a form of cancer prevention.

At the very least, the study should help Propecia compete with Johnson & Johnson's (NYSE:JNJ) Rogaine, because doctors now can prescribe Propecia without the cancer-related worries.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is an Income Investor recommendation. The Fool's disclosure policy smeared Rogaine all over itself just to see what would happen.