They have drawn up an alternative system which they argue more accurately reflects the harm that drugs do.
The new ranking system places alcohol and tobacco in the upper half of the league table, ahead of cannabis and several Class A drugs such as ecstasy.
The study, published in The Lancet, has been welcomed by a team reviewing drug research for the government.
The Academy of Medical Sciences group plans to put its recommendations to ministers in the autumn.
I would say that on balance, many 'illegal' drugs are less harmful than the two 'legal' drugs available
A new commission is also due to undertake a three-year review of general government drug policy.
The new system has been developed by a team led by Professor David Nutt, from the University of Bristol, and Professor Colin Blakemore, chief executive of the Medical Research Council.
It assesses drugs on the harm they do to the individual, to society and whether or not they induce dependence.
A panel of experts were asked to rate 20 different drugs on nine individual categories, which were combined to produce an overall estimate of harm.
In order to provide familiar benchmarks, five legal drugs, including tobacco and alcohol were included in the assessment. Alcohol was rated the fifth most dangerous substance, and tobacco ninth.
Heroin was rated as the most dangerous drug, followed by cocaine and barbiturates. Ecstasy, however, rated only 18th, while cannabis was 11th.
The researchers said the current ABC system was too arbitrary, and failed to give specific information about the relative risks of each drug.
It also gave too much importance to unusual reactions, which would only affect a tiny number of users.
Professor Nutt said people were not deterred by scare messages, which simply served to undermine trust in warnings about the danger of drugs.
He said: "The current system is not fit for purpose. Let's treat people as adults. We should have a much more considered debate how we deal with dangerous drugs."
He highlighted the fact that one person a week in the UK dies from alcohol poisoning, while less than 10 deaths a year are linked to ecstasy use.
Professor Blakemore said it was clear that current drugs' policies were not working.
"We face a huge problem. Illegal substances have never been more easily available, or more widely abused."
He said the beauty of the new system, unlike the current version, was that it could easily be updated to reflect new research.
Professor Leslie Iversen, a member of the Academy of Medical Sciences group considering drug policy, said the new system was a "landmark paper".
He said: "It is a real step towards evidence-based classification of drugs."
Professor Iversen said the fact that 500,000 young people routinely took ecstasy every weekend proved that current drug policy was in need of reform.
Home Office Minister Vernon Coaker said: "We have no intention of reviewing the drug classification system.
"Our priority is harm reduction and to achieve this we focus on enforcement, education and treatment."
He said there had been "unparalleled investment" of £7.5 billion since 1998, which had contributed to a 21% reduction in overall drug misuse in the last nine years and a fall of 20% in drug related crime since 2004.
But he added: "The government is not complacent and will continue to work with all of our partners to build on this progress."
MOST HARMFUL DRUGS