The findings of the Sydney-based George Institute for Global Health contradict the paracetamol manufacturers and doctors treatment guidelines of recommending the tablet as a common pain reliever for back pain.
The new study was published in the prestigious medical journal, The Lancet, ABC reported.
Researchers claimed that they conducted a trial involving 1600 people with back pain after being unable to find good scientific evidence that paracetamol was effective.
One group was given a placebo, another was told to take paracetamol as needed and a third received regular extended- release paracetamol three times a day.
"Surprisingly we found that it didn't really matter whether you gave people a placebo, paracetamol or time- contingent regular paracetamol, there was no difference in any of the outcomes," lead researcher Chris Maher said.
"It didn't speed time to recovery, it didn't improve their pain, it didn't improve their disability," he said, adding the jury was now out on if paracetamol works for other conditions.
There is some evidence that it works for things such as dental procedures, it might work for fever or post-operative pain, he said.
"We've looked at some of the trials for paracetamol for osteoarthritis, which is another common indication, and surprisingly when you go and have a very good look at them, we see the effects of paracetamol for osteoarthritis are very small," he said.
He said one theory he tested was that people were not taking the appropriate dose.
"Some patients say that paracetamol doesn't touch their pain and some clinicians also say that paracetamol is not effective and we thought that the reason was because they were dosing in an inappropriate fashion," he said.
"The common story you get as a clinician is a patient will come in and say they took two or three, made no difference so they stopped. When you talk to people who are pharmacists, pharmacologists - they'd say that's the wrong way to dose paracetamol and that was our theory," he said.
"If you encourage them to dose regularly, you'd see a much better result, and we didn't see that. In fact, there's no difference between any of the three groups," he said.