Ecstasy users should not be charged by police, former federal health minister Neal Blewett says.
The former Labor MP also says cannabis laws around the country are "chaotic" and need reform.
Dr Blewett made his assertions in a keynote address to a police drug and alcohol forum in Australasia on Tuesday.
He believed resources should target the most serious drug abusers.
"Already we struggle with drugs, including designer drugs scarcely on our horizon in the past," said Dr Blewett, the minister who launched Medicare.
"The whole development of the internet has introduced a vast new range of problems in the ways drugs are distributed in our society," he told 6th Australasian Drug and Alcohol Strategy Conference.
"The fact that the majority of criminal justice resources are absorbed by minor first-time drug users, by the way of cannabis and ecstasy, should make us rethink the use and allocation of these resources."
He said all use and possession of small amounts of cannabis should be treated as a civil misdemeanour. "And there is a good case for treating ecstasy in the same way."
In NSW, police charge anyone in possession of ecstasy, with the courts deciding whether a criminal conviction is recorded. With cannabis, police have the discretion to issue warnings rather than lay charges.
The conference was held jointly by the NSW and federal police.
In his address, the Federal Police Commissioner Tony Negus said large-scale drug crime was a major focus, with the country an attractive target for drug traffickers.
"This is thanks to a strong economy and Australia's apparently insatiable appetite for illicit drugs," he said.
"An example of that is the willingness of users to pay up to $300 for a single gram of cocaine, four times the cost in the UK."
Mr Negus referred to the 2013 Global Drug Survey conducted in partnership with Fairfax, with a report on Tuesday revealing about 20 per cent of the 6600 Australian respondents had used cocaine in the past year, while 45 per cent had taken it at some time in their lifetime.
"While these statistics would need further investigation, on their face value they are very alarming," he said.
Margaret Hamilton, executive member of the Australian National Council on Drugs, said experts were also focused on the array on novel drugs appearing in Australia.
"How do we decide if they are illicit, licit or if they sit somewhere in between?" Professor Hamilton said.
"We've seen this in recent concerns in the sports environment. How do we define some of these substances that are so complex that they are well ahead of our capacity to make decisions and to legislate?"
Health workers needed to work with law enforcement, politicians and international experts to tackle drug abuse, she said.