Government policies for treating drug addicts in England are flawed and "doomed to failure", a think tank says.
The Centre for Policy Studies says rehabilitation is a better use of the £3.6bn now spent on treating users with drug substitutes like methadone and keeping them on benefits each year.
But it says plans to reward groups which treat addicts so they can return to work are open to manipulation.
The Department of Health said it aimed to get users "off drugs for good".
The coalition government wants to change the way drug addiction is tackled, with more people with problems diverted away from prison and into treatment as part of what it calls a "rehabilitation revolution".
Part of this involves rewarding treatment providers who show addicts have improved their health and employment prospects.
Transfer of power
A report from the right-of-centre think tank, which has links to the Conservative Party, says these payment-by-results schemes were being run by the very organisations "responsible for the current failure of policy".
It estimates that England's 320,000 problem drug users cost £1.7bn in benefits, £1.2bn for looking after their children and £730m for treatment programmes.
The think tank calls for "a real transfer of power from large distant organisations to small innovative providers" for rehabilitation.
It says such units have a better chance of getting addicts off drugs completely, adding: "There is one simple measure of success: That of six months abstinence from drugs."
According to the report's author Kathy Gyngell, chairwoman of the prisons and addictions policy forum at the CPS, prescribing methadone to addicts delays their recovery.
She told the BBC: "The state is subsidising people to be any number of years on methadone, which has turned out not to be a cheap option and will only subsidise the tiniest proportion - 2% - to go into a rehabilitation unit that would actually free them from dependency and allow them to live their life."
A Department of Health spokesman said: "The 2010 Drug Strategy is fundamentally different from those that have gone before.
"Instead of focusing primarily on reducing the harms caused by drug misuse, our approach will be to go much further and offer every support for people to choose recovery as an achievable way out of dependence."
He added: "Work is under way to support local recovery systems tailored to the needs of communities, many of which are already showing positive results."
Correction 27 June 2011: This story has been amended to clarify that the estimate of £730m refers to drug treatment programmes and not just methadone prescriptions.