Prompted by my earlier post on legalizing marijuana, Jack Point thinks that a good way of tackling the problem of hard drugs, such as heroin is for government to give it away for free for addicts and encourage them to voluntary enroll themselves to treatment. I think that has some sense to it and better than our current policy.
I'm generally skeptical of government programs, once it's passed through the parliament and other bureaucratic processes, it wouldn't be nearly as optimal as one would want to design it. Given budgetary constraints, poor service delivery in places like Sri Lanka, there would inevitably be restrictions on accessible quantity nor would most taxpayers be too thrilled for the fact that they are financing someone else's doping habits. I think the market would do a better job in the goals Jack Point outlines, except in extreme cases where the addiction is uncontrollable.
None of this, including marijuana legalization, will happen anytime soon. At least in places like Sri Lanka where we (or at least the politicians and other intellectual types) like to pretend some sort of morally superior to the west. Even in the U.S. where marijuana usage is rampant -- Barack Obama of all people admitted he "inhaled frequently" both cocaine and marijuana. He even put it in his book. But once the changes comes in the west, not just in terms of attitude, but particularly in marijuana policy and eventually hard drugs, I think you will see changes starting happen here as well.
On the question of whether or not this will significantly reduce crime, I recall this interesting exchange between Tyler Cowen and Megan McArdle.