The state I live in in the United States, Minnesota, has a low rate of incarceration in large part because it has a low rate of criminal prosecution of drug offenses, with even the small number of persons convicted of drug offenses being unlikely to do time in prison. But this state has a thriving private industry of drug treatment centers, drawing in people from all over the world who want to become clean, and responses to drug use often include judicially ordered drug treatment. Stopping a war on drugs waged by the police and courts and prisons doesn't have to include giving up on discouraging drug use.
[1] http://www.virgin.com/richard-branson/time-to-end-the-war-on...
AFTER EDIT: I'll use the last bit of my edit window to post two more links to news reports about the experience of Portugal. These links are in chronological order, and newer than Richard Branson's blog post.
http://www.spiegel.de/international/europe/evaluating-drug-d...
http://articles.chicagotribune.com/2013-05-01/news/ct-met-po...