Confrontation is all well and good, but all too often you create enemies with the kid. People are clumsy and untrained, and no one but a trained professional should be confronting anyone. But if you do end up confronting them...
Heres a few ideas, from a trained social/psychological professional:
+Large groups are nice, for you not necessarily the person you are confronting. They will feel alienated, and insulted. This person thinks their supposed drug 'problem' is a secret. They will be embarrassed and not cooperate.
+Asking them if there is anything they should tell you is nice... but you want to be a friend, not their advisor.
+Avoid the law. It will ruin your friendship, and ruin your friends life on all levels.
+Make sure you are their closest sober friend (he may have pals that also do the drug, those don't count), if your not talk to their closest friend about it. They will handle it better than you ever will.
+Remind them you care about them, and they are a good person. Remind them that their life can be good with out the aid of drugs too, and their friends are here to support him, not judge him.
+Get a trained professional to mediate, and control the situation.
+Finally Do NOT confront them right-out, you do not honestly know that this person has a problem, this is speculation. Until they tell you, or you see them consume this drug, there is a reasonable doubt. The best way is to be their friend, stay with them and keep their mind off it. If they trust you, they will either open up to you or else. Perhaps suggest things neutral that they could do incase of an addiction. Never accuse! its tricky, and most people think they can do it... yet fail.