Like Coca-Cola, the Sazerac began as medicine. Instead of cocaine, its healing agent was—and continues to be—alcohol. It was concocted in New Orleans in the 1830s by Antoine Peychaud, who ran a pharmacy and served his potion to customers who frowned on drinking (as well as on the taxes applied to adult beverages) but were perfectly happy to enjoy their medicine. In its earliest incarnation, the Sazerac (named for the French cognac it contained) included absinthe. After 1912, when absinthe was banned for driving people insane, Pernod or Herbsaint was substituted.
Peychaud served his drink in the sort of egg cup bartenders use to measure out jiggers of liquor. In French, the name for this cup is coquetier which, when pronounced while drunk, sounds something like cocktail. It is speculated that the Sazerac was in fact the first drink called a cocktail. It has been declared the official cocktail of New Orleans—the nation’s only formally designated official cocktail—but after a legislative slugfest in 2008, lawmakers refused to make it the official cocktail of Louisiana. A state senator who voted against it worried, “Is there a possibility that we could be encouraging folks, who were not intending to drink, that it would be acceptable and they could become an alcoholic?”