I just made a new character and got myself infected right away.

I tried using vampiric drain on the lowest level bandit and some random hunter npc and this spell is extremely disappointing.

Is there any way to increase it's effectiveness besides waiting for stage 4? (Which only increases the damage by 3 points or so).

Out side of performing specific Dawnguard Quests, I'm unaware of any other way to increase it's effectiveness. Personally I don't find it effective enough to use. If I'm RPing a vampire character I personally relay on frost focused spells instead.

The extra magicka drain effect added by the Bloodstone Chalice doesn't even cover the cost of the spell, so not worth it to use.

However, that effect adds magicka absorption to your Vampire Lord drainball, which is very useful.

It's not effective in 1-1 duels.
It's best hen used in collaboration with illusion, conjuration, or a follower.
When the enemies are focusing on somethig/someone else it's great for keeping your dostance and (as the name implies) slowly *drain*-ing your opponents health while simultaneously sustaining your own health.
I honestly kinda like the spell... a lot.

Well vampiric draining was way more powerful in Morrowind than it is in Skyrim, it also might've been a lot more powerful in Oblivion as well, but haven't played Oblivion in a while so can't say. I do know fortifying your destruction damage power will make your drain spells more powerful since they are a part of the destruction school... Other than mods though that's all I can think of. Which is unfortunate really, as a vampire with nearly useless draining abilities, seems like the equivalent of a clawless flat toothed furless werewolf, mods are all I can think of though.

Sadly due to health regen, it's made even more useless.

Oblivion didn't even have vampiric drain nor Daggerfall. In Morrowind it was very effective, since resting as a vampire did not regain health. Though I completely forgot about fortifying destruction magic. Though I agree the health regain as a vampire makes it rather meh...better to just enchant a weapon with a drain spell or two.

Oblivion didn't have a dedicated vampiric life drain, no. But you could make your own spells and absorb health and absorb Magicka were on the build list. I used to make a wicked vampiric drain combined with paralysis that basically knocked your victim down and svcked em dry.

What you can do in Skyrim us make use of the absorbe health enchantment and ramp it up to a really high level, but your weapon with eat grand soul gems in seconds. I've made a waraxe of absorbe 100 health, that kills everything in a few slashes.

Vampiric Drain: From Useless to Tank

1) Enchanting leveled to 100 (all 5 Enchanter perks, Insightful Enchanter, Corpus Enchanter, and Extra Effect perks taken).

2) Heavy or Light Armor leveled to 100 (all perks taken).

3) Destruction leveled to 20 (Novice Destruction and Destruction Dual Casting perks taken).

4) All level ups into health.

5) Difficulty set to Novice.

6) One ring and one necklace to enchant and one complete matching set of armor of your choice, also to be enchanted.

7) Agent of Mara (Constant effect: 15% Magic Resist).

8) Lord Stone (50 points of armor Rating and 25% Magic Resist).

9) Stage 4 of Vampirism.

Enchantments (all values without fortify potions):

Head: Fortify Destruction (25%), Fortify Magic Regen (50%)

Neck: Fortify Destruction (25%), Magic Resist (20%)

Chest: Fortify Destruction (25%), Health Regen (25%)

Hand: Fortify Armor (25 points), Fortify Unarmed (12 points) - just for occasional fun!

Finger: Fortify Destruction (25%), Magic Resist (20%)

Foot: Shock Resist (37%), Stamina Regen (25%)

With an armor rating of a little over 300, magic resistence of 70%, protection from shock damage, and infinite dual casting of vampiric drain for 24 absorb-health/sec, well, you'd be surprised.

See this topic for a little exploration on my part: http://www.gamesas.com/topic/1514455-my-new-vamp/