A rotary drag bit suitable for directional drilling. The bit includes a bit body from which extend radially-oriented blades carrying PDC cutters. The blades extend to primary gage pads, above which secondary gage pads are either longitudinally spaced or rotationally spaced, or both, defining a gap or discontinuity between the primary and secondary gage pads through which drilling fluid from adjacent junk slots may communicate laterally or circumferentially. Longitudinally leading edges of the secondary gage pads carry cutters for smoothing the sidewall of the borehole. The cutters are preferably configured and oriented so as to provide a relatively aggressive cutting edge to the formation in both longitudinal and rotational directions of bit movement, the cutting edges lying adjacent cutting surfaces preferably disposed at negative rake angles to the formation material of the borehole wall for enhanced durability. Cutters may likewise be disposed on the trailing ends of the secondary gage pads to provide an up-drill capability to facilitate removal of the bit from the borehole. The tandem primary and secondary gage pads provide enhanced bit stability and reduced side cutting tendencies. The discontinuities between the primary and secondary gage pads enhance fluid flow from the bit face to the borehole annulus above the bit, promoting formation cuttings removal. The tandem gage arrangement also has utility in conventional bits not designed specifically for directional drilling.