A rotary drill bit having blades with gage pads disposed on exterior portions thereof to improve steerability of the rotary drill bit during formation of a directional wellbore without sacrifice of lateral stability. One or more of the gage pads may include radially tapered exterior portions and/or cut out portions to assist with reducing wear of the associated gage pad. For some applications, a rotary drill bit may be formed having blades with gage pads having a relatively uniform exterior surface. Hard facing material and/or buttons may be disposed on exterior portions of the gage pad to form a radially tapered portion to improve steerability, reduce wear of the gage pad and/or improve ability of the rotary drill to form a wellbore having a generally uniform inside diameter, particularly during directional drilling of the wellbore.