This is a really dumb way for doctors to prescribe finasteride, by the way.
If we assume that the reason patients get finasteride this way is to get insurance to cover it, and the doctor has no evidence to suggest the patient actually has an enlarged prostate, and further doesn't document a physical exam confirming the enlarged prostate, it's basically insurance fraud.
If this is simply a way to get the patient pills via prescription regardless of the insurance coverage (you said yourself that it's cheap, and hair loss is cosmetic and therefore shouldn't even be covered by insurance), this is even more stupid, because doctors are well within their rights to prescribe or administer medications that are FDA approved for one condition "off label".
Different countries have different health systems and doctors face different constraints. This was in Israel in the early 2000s.
In this case it was done just to save the doctor the hassle of arguing with the higher ups. It's been a while, but if I recall correctly, Merck was aggressively enforcing its patent rights. It was even raiding compounding pharmacies that sold lower dose formulations of finasteride instead of the brand name Propecia.
If we assume that the reason patients get finasteride this way is to get insurance to cover it, and the doctor has no evidence to suggest the patient actually has an enlarged prostate, and further doesn't document a physical exam confirming the enlarged prostate, it's basically insurance fraud.
If this is simply a way to get the patient pills via prescription regardless of the insurance coverage (you said yourself that it's cheap, and hair loss is cosmetic and therefore shouldn't even be covered by insurance), this is even more stupid, because doctors are well within their rights to prescribe or administer medications that are FDA approved for one condition "off label".