Sinn Féin's Aengus Ó Snodaigh said the drugs crisis has been lost and forgotten in the midst of the economic crisis.
Mr Ó Snodaigh said the report by the European Monitoring Centre should serve as a stark reminder and a wake-up call to the Government.
According to the report, he said, Ireland has the worst heroin problem, the second worst ecstasy problem and the third worst cocaine problem in Europe.
Mr Ó Snodaigh said the Government should be adding resources and not cutting resources to drug treatment projects.
In response, Minister for Health James Reilly said the report is historic rather than current, as it is based on a 2006 and 2007 drugs prevalence survey.
He said that not all contributors to the survey would have provided as comprehensive a set of figures as Ireland.
He acknowledged, however, that the country has a problem of heroin use in Ireland, particularly in Dublin.
Gardaí and Revenue are vigilant in their efforts to prevent illegal drugs entering the country, he said.
The Minister said there are over 14,000 known heroin users in Ireland and 9,000 are in receipt of methadone.
He said a heroin addict can expect treatment within a month of being assessed.