Chapter 4 studies illegal drugs, a significant driver of crime and a central issue in Latin American politics and society. One in five inmates is incarcerated for drug-related crimes, and at least one in three uses drugs regularly inside prisons. This chapter examines the patterns of drug crimes, the revenue made from selling or transporting drugs, and the income offenders made prior to being arrested, as well as the use of drugs inside prisons (who supplies the drugs, how much is spent on drugs, who controls drug trafficking inside the correction facilities, and how big the illegal prison market is). We show that law enforcement overwhelmingly targets “easy to catch” drug-traffickers, while barely making inroads on dismantling illegal drug industries, and facilitates the replacement social mechanism. Prison has become an extreme punishment that has had only limited success in reducing the supply of illegal drugs.