Legalize it, tax it, and release non-violent drug offenders.
Let the taxes pay for treatment and regulation and pocket the money we save on not having so many prisons.
Private prisons have nothing to do with it. They are a relatively recent phenomenon. Drugs have been illegal for the best part of a century. And for most of that time, government prisons housed the prisoners.
We keep doing what we have been doing because no one wants to admit defeat, particularly in government. If we legalize most drugs tomorrow and the problem greatly abates, what does that say about the wisdom of the policies we have been pursuing since before I was born - and the politicians who enforced those laws?
Politicians are reluctant to undermine their own self-image of being competent and having the answers to problems.