Pound said the IOC might be left with no choice other than to take drastic action if Armstrong was able to prove the International Cycling Union had acted improperly.
"We could say, 'look, you've clearly got a problem why don't we give you four years, eight years to sort it out," Pound said.
"And when you think you're ready come on back we'll see whether it would be a good idea to put you back on the program."
A former head of the World Anti-Doping Agency, Pound said it was clear the IOC needed to take matters into its own hands in the wake of the Lance Armstrong doping scandal.
"The only way it (cycling) is going to clean up is if all these people say 'hey, we're no longer in the Olympics and that's where we want to be so let's earn our way back into it,'" Pound said.
"The IOC would have to deal with it, the (UCI) is not known for its strong actions to anti-doping.
"It was the same in weightlifting a few years ago, all of a sudden when you get right up against it things go fuzzy and they say, 'well, we can't punish innocent athletes in these sports by dropping the sport from the program.'"
Pound made his comments after talk show host Oprah Winfrey confirmed media reports that Armstrong admitted to using performance-enhancing drugs in an interview that was taped on Monday.
The full details will not be known until the interview is broadcast on Thursday and Friday although CBS reported that Armstrong indicated he might be willing to testify against others.
"You have to wait to see to what degree he has admitted, to what degree he is prepared to help," said Pound.
"Some of the press reports I've seen say he had a lot of help from high cycling officials and he is willing to tell all about that."
Pound helped start up WADA and headed up the IOC ethics committee that cleaned up the organization following the Salt Lake City Olympic corruption scandal.
But the Canadian lawyer said any possible changes to cycling's status were unlikely to happen until after the next IOC presidential election, in August this year.
"I don't think under the current administration, that has only a year left, that anything that drastic would happen but maybe under a new president would say 'alright, we've got this started now once and for all let's send out a message,'"
WADA, founded after the Festina doping affair in the 1998 Tour de France, has long been critical of the UCI's handling of doping in the sport with Pound routinely slamming cycling bosses.
Despite agreeing that Armstrong cheated his way to the top, USADA and the UCI have continued to trade thinly veiled insults.
UCI president Pat McQuaid said the U.S.Anti-Doping Agency, whose damning investigation led to Armstrong's downfall, should have handed over its dossier on the disgraced American to a neutral investigator and that anti-doping agencies needed to share the blame because their tests failed to catch him.
USADA responded by saying the UCI's banning of Armstrong was not the end of the problem because USADA's investigation showed that doping was rife in professional cycling.
In a recent interview on 60 Minutes Sports, USADA chief Travis Tygart said that the UCI had wrongfully accepted $100,000 gift from Armstrong.
"That (a possible cover-up) could be an even bigger story and that is still to come," said Pound.
"There will be a lot of people watching for that and if in fact there was assistance from the UCI and Lance describes it, that could be the real assistance he could give to the fight and result in a reduction of his life sentence (from competition)."