At that time, Portugal, like the junkies of Casal Ventoso, had hit rock bottom: An estimated 100,000 people - an astonishing 1 percent of the population - were addicted to illegal drugs. So, like anyone with little to lose, the Portuguese took a risky leap: They decriminalized the use of all drugs in a groundbreaking law in 2000.
Now, the United States, which has waged a 40-year, $1 trillion war on drugs, is looking for answers in tiny Portugal, which is reaping the benefits of what once looked like a dangerous gamble. White House drug czar Gil Kerlikowske visited Portugal in September to learn about its drug reforms, and other countries - including Norway, Denmark, Australia and Peru - have taken interest, too.
"The disasters that were predicted by critics didn't happen," said University of Kent professor Alex Stevens, who has studied Portugal's program. "The answer was simple: Provide treatment."
Drugs in Portugal are still illegal. But here's what Portugal did: It changed the law so that users are sent to counseling and sometimes treatment instead of criminal courts and prison. The switch from drugs as a criminal issue to a public health one was aimed at preventing users from going underground.
Other European countries treat drugs as a public health problem, too, but Portugal stands out as the only one that has written that approach into law. The result: More people tried drugs, but fewer ended up addicted.
Here's what happened between 2000 and 2008:
* There were small increases in illicit drug use among adults, but decreases for adolescents and problem users, such as drug addicts and prisoners.
* Drug-related court cases dropped 66 percent.
* Drug-related HIV cases dropped 75 percent. In 2002, 49 percent of people with AIDS were addicts; by 2008 that number fell to 28 percent.
* The number of regular users held steady at less than 3 percent of the population for marijuana and less than 0.3 percent for heroin and cocaine - figures which show decriminalization brought no surge in drug use.
* The number of people treated for drug addiction rose 20 percent from 2001 to 2008.