The top US drugs official has said anti-drug efforts are having the best results of the past 20 years.
Mr Walters credits Mexican efforts for part of the success
John Walters, head of the Office of National Drug Control Policy, said cocaine shortages had led to a jump in prices in 37 American cities.
Efforts on both sides of the Mexican border have disrupted the flow of all drugs into the US, Mr Walters said.
But he said it had not yet been proven if the results could be sustained over the long term.
Mexican traffickers extradited
Mr Walters was speaking as the US and Mexico work out the details of an aid plan - expected to total $1bn - for Mexico to help combat drug cartels.
About 90% of the cocaine entering the US comes through Mexico.
"What's happened for the first time in two decades is we now see widespread reports of cocaine shortages in the United States," Mr Walters said.
Thirty-seven cities had reported "the lack of the ability to receive wholesale amounts, kilo amounts, of cocaine in the quantities previously supplied at prices previously charged", he said.
As a result of the drop in supply, the price of cocaine had increased by 24% and nearly doubled in some cities.
The drugs tsar credited Mexican President Felipe Calderon for some of the success.
He said US investigators had been working closely with Mexican authorities in their fight against the drug cartels.
Since Mr Calderon took office in December he has sent 25,000 soldiers and police to Mexican provinces plagued by drug violence and it seems to be working, says the BBC's Duncan Kennedy in Mexico City.
Several high-profile Mexican traffickers have been extradited to the US in recent months.
Mr Walters also said that fewer American workers were showing positive on drug tests and that there were fewer cocaine-related hospital admissions.
The real challenge, he said, would be maintaining the results over the long term.