This report includes four chapters: (1) outlines the overall Federal strategy for dealing with the drug abuse problem and refines and extends several basic components of the strategy; (2) presents an assessment of the nature and extent of drug abuse in America, focusing particularly on the preceding three years; (3) summarizes the considerable progress which has been made in improving the Federal drug abuse program over the preceding 18 months; and (4) discusses the remaining problems and outlines the framework for dealing with them. The paper concludes that the adverse effects of drug use represent the real cost to society; the Federal program should balance supply and demand reduction efforts; priority should be given to the most dangerous drugs; and available resources should be more effectively mobilized and used. Footnotes, figures, charts