But WADA president Craig Reedie says he needs to await a report from his independent commission into the issue of doping in athletics before fully backing any such approach.
Athletics' governing body, the IAAF, has come under intense scrutiny for its anti-doping stance ahead of the world championships, which take place from August 22 to 30 in the Chinese capital Beijing.
When asked by CNN if he believes the point has been reached whereby banning a country is necessary to enforce change, Reedie replied: "I suspect so."
"I would want to wait until I see what my expert commission says about this," he added.
WADA created an independent body in December to look at allegations of widespread doping in Russian athletics.
Earlier this month, its remit was widened to include claims made by German broadcaster ARD and British newspaper The Sunday Times.
These allege that a third of medals awarded in endurance events in the Olympics and world championships between 2001-2012 were won by athletes who had recorded suspicious doping tests in the past.
Over half the 800 athletes whose blood samples were described by experts as "highly suggestive of doping or at the very least abnormal" came from Russia.
Creating a competitive ban for the host country of such athletes is a prospect that Reedie does not rule out.
"The fact that this is being discussed as a potential sanction is not entirely unhelpful," said the Scot, 74.
"It's a very, very serious sanction because it tends to be a pretty blunt instrument. Maybe that's required. I'm not sure. It's never been done before."
'Infrequent but effective'
While a country has never been banned from a multi-category competition such as the Olympics, Reedie said there has been a precedent in nations being banned by individual sports' ruling bodies.
"The sport has turned around and said, 'At the moment, your record isn't good enough so we don't want you coming to our events for a period of years," he said.
"It's happened very infrequently but I think it's been effective."
The International Weightlifting Federation is one entity that bans countries
whose members frequently flout anti-doping rules.
Any member nation whose lifters fail three or more doping tests will be punished by the banning of "all or any team officials" for a period of up to two years. Nine or more violations carry a suspension of up to four years.
In 2001, the IWF suspended Nigeria for repeated doping offenses, meaning Africa's most populous nation could not send weightlifters to the 2002 Commonwealth Games.
Meanwhile, world equestrianism's governing body, the FEI, suspended the United Arab Emirates earlier this year following a series of scandals over doping, horse welfare and phantom races.
According to the Sunday Times and ARD, Russia has emerged as the "the blood testing epicenter of the world" with more than 80% of the country's medals won between 2001-2012 by suspicious athletes.
Eighteen of the medals won by Kenya in the same time period are also under suspicion, the media organizations reported.
Turkey -- whose Olympic 1,500m champion Asli Cakir Alptekin was stripped of her gold medal on Monday -- is another country causing concern.
Alptekin lost her medal after the IAAF appealed to the Court of Arbitration for Sport when the 29-year old was initially cleared by Turkish authorities.
While WADA can lobby for the introduction of such a ban, it cannot impose any suspension itself.
'Lack of funds'
As it battles to combat one of the major issues facing sport today -- with match-fixing the other -- Reedie admits WADA lacks the sufficient resources to tackle the issue.
This ranges from insufficient funding, which has a direct effect on how many tests the organization can do, to the fact that those participating in doping are often one step ahead.
"People who wish to cheat have different and more opportunities to cheat than we have to resolve it in conventional ways," said Reedie.
"If somebody produces a completely new substance that should be banned, it will take us some time to firstly identify it and then create a test (for it)."
Even when the latter is successfully devised, financial limitations mean WADA is unable to test as many athletes as it would like.
One test can cost as much as $1,500, which means that anti-doping agencies prefer to test an individual they suspect of doping rather than blanket test across the board.
"We don't have enough money, but we're realistic," said Reedie.
"We're now up to roughly $30 million a year as a budget. I think we have become pretty efficient at doing this much as we've been able to do within the restrictions that we have in budget terms. But yes, a little bit more help would be warmly welcomed.
"If you look at our new (anti-doping) code, you will see there's a much greater emphasis on investigations and intelligence gathering, and this involves a whole range of entities -- law enforcement, customs and sports people.
"You can pick up lots of information which allows you to then target a test, rather than blanket test lots of athletes.
"Some of the major successes that the anti-doping movement has made have come from these non-analytical efforts."
Reedie, who began his three-year term as WADA president in January 2014, is hopeful there are other cost-effective measures that can help in one of sport's biggest issues.
With WADA lacking the power to ban people from competition, and sports lawyers advising that a lifetime ban for drugs cheats is unenforceable, Reedie believes the best route for change may come from athletes themselves.
Recently, a handful of German athletes -- Olympic discus champion Robert Harting, race walker André Höhne and 800 meters runner Robin Schembera -- have launched a campaign for transparency
To kickstart their program, they voluntarily made public their blood test results from the secret IAAF database that was exposed earlier this month.
"I've seen videos that came from Germany where athletes are saying, 'This isn't right'," said Reedie.
"It may well be that clean athletes need to speak up very strongly so that this debate can be developed. We need a little bit of a great revolution from the clean athletes to say, 'This is the way we want it.'
"At the end of the day, that might work well in terms of the argument for higher sanctions or for banning people from competition."