The Department of Transport report by lawyer Sir Peter North said such information should be provided on prescription and OTC medicines.
The report argued that the government and drug industry should consider 'a simple and easily communicated system of advice related to driving', such as the French system.
In France, yellow is used to indicate that patients should not drive without reading the leaflet, amber for 'do not drive without advice from a health professional' and red for 'do not drive'.
Dr Bill Beeby, chairman of the GPC prescribing subcommittee, said that the problem of medicines impairing people's ability to drive had no simple answer.
A traffic light system would be unable to take into account interactions between medicines or differences between individuals in the effect of a medicine, he pointed out.
Dr Beeby said discussions on the best solution to the problem were ongoing, but that it was important to avoid over-regulation. 'We don't want a situation where no one can take anything without a risk assessment.'
Dr Beeby also stressed that different solutions would be needed for recreational drugs, whether legal or not, and medicines prescribed by doctors or available OTC.
The report also recommended that the NHS, the DoH and the Driver Vehicle Licensing Authority should 'ensure that doctors are consistently reminded, in their training, their practice and their assessment, of the importance of routinely providing clear advice to patients on the effects of prescribed drugs on driving'.