The Evening Standard reports that cocaine use has fallen 14% this year (based on the number of addicts seeking treatment) due to dealers lowering the purity of their product. This illustrates a number of problems with drug prohibition.
The principle problem is the limit to regulatory oversight that can be exercised on the trade due to its illegality. This doesn't just mean government regulation, but the potent voices of consumer groups, the media, and competition, which don't resort to violent means. It is a testament to the power of the market that even considering the power of drug addiction, they have recognised the drop in drug quality and gone in search of substitutes.
Just imagine if the media could easily report on specific cases of drug dealers adding cancer-inducing substances to their products. Imagine if consumer groups could easily assess legal dealers, approving some, and destroying the bad ones through boycotts and low ratings, with addicts easily able to switch suppliers without the threat of violence. Imagine drugs sold with no risk to the dealer, no longer having to rely on the protection of violent gangs for a cut of the profits, but on the law. Coupled with the legalisation of prostitution, how would gangs, terrorist groups and sex traffickers then finance themselves?
The illegal drugs market is dangerous and flawed precisely because it is illegal. "Market failures" of low quality, even dangerous products, along with powerful suppliers with local monopolies enforced by violence, are all caused by prohibition. Without any oversight or the ability of consumers to gain information about the products they buy, dangerous substances will always be used to bulk out the powders sold. Without drug users able to come to the law for help, they will often become pressured and coerced by criminals who are happy to use violence instead of trading. It is remarkable that consumer pressures could have had an effect even with all these obstacles presented to them. The effects of the market with these obstacles lifted would be almost miraculous.