The spending, revealed by Australian Bureau of Statistics research, dwarfs the amount devoted to fighting the drug scourge and helping addicts.

The amount spent was $2 billion more than Australians spent on fashion and nearly double their spending on literature.

Figures from 2011-2012.

Drug experts and anti-drug campaigners said the data showed Australians spent about seven times more buying drugs in 2010 than governments spent on enforcing drug laws.

The figures have raised questions about the effectiveness of spending on anti-drug laws and prohibition.

The vast majority of the drug money is going directly to drug manufacturers and sellers, with early analysis from a Bureau of Statistics staff research project showing profit margins of more than 80 per cent.

The chief executive of drug harm minimisation group Anex, John Ryan, said he was staggered to see how big the drug market was.

"There is no doubt that the profit incentive is driving it,'' Mr Ryan said.

He called for a Productivity Commission inquiry to examine the costs of drug use, and how government money was spent dealing with the problem.

Research released this week by the Drug Policy Modelling Program at the University of NSW calculated Australia was spending about $1.1 billion on enforcing drug laws, $361 million for treatment and $36 million for harm reduction.

''These figures put together really blow the idea we have got the drug market in check out of the water,'' Mr Ryan said.

A draft of the ABS staff research seen by The Saturday Age calculates the size of the market using health and law enforcement data on drug use, seizures, purity and import costs.

Figures updated since the first draft, provided by Anex, showed that in 2010 Australians spent about $3.8 billion on cannabis.

Australian Drug Law Reform Foundation president Alex Wodak said the data showed that the economic forces driving illicit drug consumption would always trump the forces of law enforcement.

"The economic forces ensure that the only arrangements that are politically acceptable at the moment, i.e. drug prohibition, cannot work," he said. "In the short term, political forces always triumph. In the long term, economic forces always win."

Dr Wodak said he believed the figure could be an underestimate, as a report by Access Economics in the late 1990s had estimated the cannabis market alone was worth $5 billion.

Australian National Council on Drugs executive director Gino Vumbaca said the figures showed why drug treatment and harm reduction programs were struggling to meet demand.

"Not everyone who takes drugs has a problem but if you are telling people they have to wait [for treatment] that's problematic," Mr Vumbaca said.

"This data shows you are not going to arrest your way out of alcohol problems and you are not going to arrest your way out of drug problems, particularly when there is billions of dollars in sales involved."

The president of Families and Friends for Drug Law Reform, Brian McConnell, said drug laws may not be stopping people taking drugs but they were pushing "young and naive" people towards synthetic versions.

Read more at The Age