Researchers analysed data from seven government-funded programmes that tracked the illegal drug market over more than a decade.
Three of the programmes monitored international drugs trafficking; three focused on the United States; and one tracked the drugs business in Australia.
The prices of heroin, cocaine and cannabis tumbled by 81 percent, 80 percent and 86 percent respectively between 1990 and 2007 in the United States when adjusted for inflation, the researchers found.
Over the same period, the average purity of these drugs rose by 60 percent, 11 percent and 161 percent respectively.
In 18 European countries, the street price of cocaine and heroin fell by 51 and 74 percent between 2000 and 2009.
Neither the purity of drugs seized in Europe nor the price of cannabis on the continent was given in the study.
In Australia, meanwhile, the inflation-adjusted price of cocaine fell by 14 percent between 2000 and 2010, and that of heroin and cannabis by 49 percent.
“During this time, seizures of these drugs in major domestic markets generally increased,” said the study’s authors, led by Evan Wood of the Urban Health Research Initiative in Vancouver, Canada.
“With few exceptions… illegal drug prices have generally decreased while drug purity has generally increased since 1990,” they added.
The global supply of illicit drugs had likely not been reduced in the last two decades, the study said, and the availability of cannabis and opiates like heroin may even have increased.
“These findings suggest that expanding efforts at controlling the global illegal drug market though law enforcement are failing,” said the paper published in the open-access journal BMJ Open.
The findings coincide with debate in several countries about whether to loosen laws on certain drugs.
Uruguay in August took a step towards becoming the world’s first nation to produce and distribute marijuana after its lower house of parliament approved a bill putting control of the drug in government hands.
In a 2011 report, the UN Office on Drugs and Crime (UNODC) estimated the global illegal drug trade to be worth at least $350 billion (259 billion euros) annually.