This report presents the findings of the Victorian component of a national investigation into the heroin shortage which began in early 2001. The aim of the research was to investigate the heroin shortage in Melbourne in some detail with a view to examining the longer term consequences of the heroin shortage in Victoria. The analysis finds that the heroin shortage was characterised by reports of decreased availability and purity, and increased price, of heroin in Melbourne. The heroin shortage was also associated with a decrease in the reported use of heroin and overall injection frequency reported by samples of injecting drug users in Melbourne; a dramatic decline in the number of heroin related deaths in Victoria; a dramatic decline in the number of non fatal heroin overdoses in Melbourne that was most acute in the Central Business District; a dramatic decline in the number of opioid hospitalisations in Victoria; a decline in the number of courses of treatment for opioids provided by the specialist drug treatment service system; a short term increase in the number of robbery incidents recorded by Victoria Police; and a decline in heroin related incidents recorded in areas of Melbourne containing street based drug markets. The findings also suggest the emergence of a market for prescribed pharmaceuticals among injecting drug users that has been sustained in the longer term. Unlike other jurisdictions, there did not appear to be an increase the use of cocaine. (Executive summary, edited)