Medical researchers have said the so-called war on drugs is failing to curb supply despite the increasing amounts of funding for law enforcement.
Street prices of illegal drugs have fallen in real terms since 1990, while the purity of the substances has generally increased.
The research by the International Centre for Science in Drug Policy has been published in the online journal BMJ Open.
Most national drug control strategies have focused on law enforcement to curb supply despite calls to explore other approaches, such as decriminalisation and strict legal regulation, according to the report.
The study looked at data from seven international government-funded drug surveillance systems, which had at least ten years of information on the price and purity of cannabis, cocaine and opiates, including heroin.
The report said: "The global supply of illicit drugs has likely not been reduced in the previous two decades."
It added: "The data presented in this study suggest that the supply of opiates and cannabis have increased, given the increasing potency and decreasing prices of these illegal commodities.
"These findings suggest that expanding efforts at controlling the global illegal drug market through law enforcement are failing."
Co-author Dr Evan Wood, scientific chair of the International Centre for Science in Drug Policy, said: "These findings add to the growing body of evidence that the war on drugs has failed.
"We should look to implement policies that place community health and safety at the forefront of our efforts, and consider drug use a public health issue rather than a criminal justice issue.
"With the recognition that efforts to reduce drug supply are unlikely to be successful, there is a clear need to scale up addiction treatment and other strategies that can effectively reduce drug-related harm."
The study also reviewed the number of seizures of illegal drugs in drug production regions and rates of consumption in markets where demand for illegal drugs is high.
Among the findings, the report said that in Europe the average price of opiates and cocaine, adjusted for inflation and purity, decreased by 74% and 51% respectively between 1990 and 2010.
The United Nations recently estimated the illicit drug trade is worth at least €259bn every year.