From the BBC:
The panel includes former UN Secretary General Kofi Annan, the former leaders of Mexico, Colombia and Brazil, and the entrepreneur Sir Richard Branson.
The White House rejected the findings, saying the report was misguided.
As well as Mexico's former President Ernesto Zedillo, ex-Brazilian President Fernando Henrique Cardoso and former Colombian President Cesar Gaviria, the 19-member commission includes the former US Federal Reserve chairman Paul Volcker and the current Prime Minister of Greece George Papandreou.
The panel also features prominent Latin American writers Carlos Fuentes and Mario Vargas Llosa, the EU's former foreign policy chief Javier Solana, and George Schultz, a former US secretary of state.
'No harm to others'
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AdvertisementCesar Gaviria said the US was one of the countries which came in for criticism
Their report argues that anti-drug policy has failed by fuelling organised crime, costing taxpayers millions of dollars and causing thousands of deaths.
It cites UN estimates that opiate use increased 35% worldwide from 1998 to 2008, cocaine by 27%, and cannabis by 8.5%.
The authors criticise governments who claim the current war on drugs is effective:
"Political leaders and public figures should have the courage to articulate publicly what many of them acknowledge privately: that the evidence overwhelmingly demonstrates that repressive strategies will not solve the drug problem, and that the war on drugs has not, and cannot, be won," the report said.
Instead of punishing users who the report says "do no harm to others," the commission argues that governments should end criminalisation of drug use, experiment with legal models that would undermine organised crime syndicates and offer health and treatment services for drug-users.
It calls for drug policies based on methods empirically proven to reduce crime and promote economic and social development.
The commission is especially critical of the US, saying it must abandon anti-crime approaches to drug policy and adopt strategies rooted in healthcare and human rights.
"We hope this country (the US) at least starts to think there are alternatives," said former Colombian President Cesar Gaviria.
"We don't see the US evolving in a way that is compatible with our (countries') long-term interests."
The office of White House drug tsar Gil Kerlikowske rejected the panel's recommendations.
"Drug addiction is a disease that can be successfully prevented and treated," said a spokesman for the Office of National Drug Control Policy.
"Making drugs more available - as this report suggests - will make it harder to keep our communities healthy and safe."