Managers have stamped out the gang culture that once ruled the corridors of Ashworth special hospital through increased security, an inquiry heard this week.
But the clampdown at the hospital's personality disorder unit has led to a sense of mistrust, it was alleged, with nurses being turned into security guards.
And drugs will never be eliminated from the system, according to one of the first patients to give evidence.
The judicial inquiry, which opened in London last year, moved to the Merseyside hospital this week.
It was sparked by allegations of drug and alcohol misuse, financial irregularities, possible paedophile activity and the availability of pornographic material on the hospital's PDU wing.
A former army corporal, known only as Patient B, told of the marked decrease in drug dealing and the disappearance of pornography once found on the PDU wards.
Before security was tightened, gang leaders had led a campaign of mental intimidation on Owen Ward. Staff were aware of the situation, Patient B alleged.
Drugs, he said, would never be wiped out of the prison or security hospital system.
'I, as a patient, know who deals and smokes drugs. I find it hard to believe people in authority don't,' he added.
Patient B talked of manipulation in the PDU, and also described how two clinical staff at the hospital fought in the car park.
'I find it strange, to say the least, that we were on a course for anger management and our facilitators had a stand-up fight in the car park,' he added.
Although Patient B spoke positively of the treatment he had received at Ashworth, he also expressed concerns about the workload of some of the psychologists there which made it difficult to give patients individual attention.
He also said nurses had been forced to take on the role of security guards since tighter regulations were brought in. It was now difficult to trust some of the staff in their new roles.
The inquiry is being chaired by recently retired senior circuit judge Peter Fallon QC.
A new management team that will develop Ashworth as a 'centre of excellence for forensic mental care into the next century', was announced by chief executive Hilary Hodge last week.
Roger Kendrick, a former prison governor, has been appointed director of corporate safety and security.