[sekhat]

Ultimately, I understand it as this.

Especially in terms of psychological effecting drugs

If the people getting the placebo get better (in the case of psychological drugs.. feel better) as often as those on the actual drug, then it's quite likely the drug is doing nothing and both sets of patients are getting better because the belief of taking a drug that makes them better is causing them to get better.

(apologizes for the confusing paragraph)

And hence, the drug is deemed worthless and thrown out, time to get on with a trial of another drug.

[tinco]

"it is quite likely the drug is doing nothing"

The only way to be sure that the drug is doing nothing is to repress the placebo effect as much as possible.

There are people dying or suffering that could be helped with drugs that failed the placebo test. (Some of them could even have been helped with the placebos themselves)