If we have $n$ bags, we will need $k = \log_2{n}$ turns to figure out which bag has the drugs.
The procedure would be similar to what you said in the first step.
Let us number each bag and represent this number in binary system. First turn would be first half bags, i.e., bags with $1$-th MSB equal to 1 (i.e., the first MSB from the leading edge), second turn would be another half set of bags which have $2$-th MSB equal to 1, and so on. In general, $m$-th turn would be all the bags with numbers which have the $m$-th MSB equal to 1.
We cannot beat $k = \log_2{n}$ turns, since each outcome of sniffing is binary and as we need $\log_2{n}$ bits to represent $n$ bags.