Stability and turbulence in illegal drug markets (2026)

Illegal drug markets generate enormous harms and involve large amounts of money. This article provides a primer on illegal drug markets, with an emphasis on supply chains. While some features of illegal drug markets have been quite stable over time (e.g., quality of the product is often very difficult to determine from visual inspection), there have been major changes over the past 15 y (e.g., explosion of fentanyl use in North America, increasing use of cryptocurrencies in illegal drug transactions). The article highlights the need for monitoring the price and purity of drugs along the supply chain to better understand supply changes and evaluate policy interventions.
This article provides a primer on illegal drug markets, with a focus on the structure and nature of these markets and the enterprises involved. The markets for illegal drugs are large, with annual retail expenditures likely exceeding $100 billion in the United States alone. Many drugs are easy to produce, and their high value-to-weight ratios make them attractive to smugglers. Some features of illegal drug markets have been quite stable, such as the small size of retail purchases, in part because most sales are to people who use frequently and typically do not buy in bulk. Between production and consumption, most of these substances cross multiple borders - and often continents - and the mark-ups along the supply chain continue to be substantial. But there have been major changes over the past 15 y. While illegally manufactured synthetic drugs are not new, the proliferation of fentanyl and other synthetic opioids created an overdose crisis in North America and has other countries on high alert. The internet has also made producing and accessing a wide range of drugs and their precursor chemicals easier. The emergence of cryptocurrencies has created new opportunities to hide transactions and launder the proceeds. In addition to highlighting the stability and turbulence in these markets, this article offers ideas for future research and emphasizes the need for monitoring purity-adjusted drug prices, which is critical for understanding supply changes and evaluating interventions in these markets. [Author's abstract]