Drug laws in eight Latin American countries have exacerbated their prison overcrowding problems and failed to curb trafficking, a study says.
The Transnational Institute and the Washington Office on Latin America say most of those convicted are not high or medium-level drug traffickers.
Imprisoning minor offenders is "useless", as they are easily replaced by the bosses at the top, they warn.
But for most of those locked up, they add, "prison can destroy their lives".
On Wednesday, a fire at an overcrowded prison in Chile killed more than 80 inmates.
Officials said the blaze at the San Miguel jail in the capital, Santiago, was started deliberately during a fight between rival gangs.
President Sebastian Pinera has promised to end overcrowding, calling the current system "absolutely inhumane". Officials say there are 24,000 more inmates than places in Chile's prisons.
Prison overcrowding is widespread in Latin America and the study by the TNI and WOLA - covering Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico, Peru, and Uruguay - draws a link between the problem and counter-narcotics policies.
"The drug laws impose penalties disproportionate to many of the drug offences committed, do not give sufficient consideration to the use of alternative sanctions, and promote the excessive use of preventive detention," it says.
The report also says that those who are incarcerated tend to "occupy the lowest links in the chain", such as users caught with small amounts of drugs and street-level dealers.
These laws have overcrowded the prisons - with a high human cost - but have not curbed the production, trafficking, or use of drugs, it argues.
"Imprisoning minor offenders to restrict drug trafficking is useless, for the next day the bosses at the top replace them. But for the persons locked up, prison can destroy their lives," said Pien Metaal, co-ordinator of TNI's drug law reform project.
"The criminal law approach to these persons also swamps the systems of administration of justice, thereby negatively impacting society as a whole," she added.
The study concludes that those charged with and convicted of drug offences are often denied penalties that constitute alternatives to imprisonment.
And in most of the countries the severity of the sentences is grossly disproportionate to the crime, it says. In Ecuador, a low-level drug transporter, or "mule" may receive a longer prison sentence than a murderer.
"Many drug users end up in jail - even when their country's law does not provide for imprisonment of users - as they are taken for dealers," Ms Metaal said.
"To re-establish proportionality in sentencing, it is important that the authorities introduce clearer guidelines to identify the different levels of trafficking and the different types of drugs and to keep users from ending up in prison."
Those imprisoned typically come from the most vulnerable sectors of society - those with little formal education, low incomes, and limited opportunities - and include an increasing number of women, many of them single and poor mothers.