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Placebo groups are often included in randomized control trials evaluating drug therapy, yet we know little about the placebo effect. The purpose of our study was to evaluate how the presence of a placebo group in a randomized control trial (RCT) influences the patients' ratings of the efficacy of an active drug therapy and their reporting of its adverse effects. We identified studies published between 1966 and 1994 using MEDLINE. Randomized control trials evaluating acetylsalicylic acid, diclofenac, or indomethacin for the treatment of osteo or rheumatoid arthritis were included in our sample. Two investigators independently extracted data. Fifty-eight treatment arms met our inclusion criteria and were available for analysis. Twenty-five treatment arms evaluated a nonsteroidal antiinflammatory drug (NSAID) in placebo control trials and 33 in comparative trials. Using a logistic regression model to adjust for the differences between the evaluated drugs and between the types of arthritis, we found that patients receiving an NSAID in a placebo control trial were more likely to withdraw due to inefficacy (OR=1.3; 95% CI, 1.0 to 1.6; P=0.04). Using a similar model, withdrawals due to adverse effects were found to be more common when the NSAID was given in trials that did not include a placebo group (OR=1.5; 95% CI, 1.1 to 1.9; P=0.002) as were reports of cutaneous (OR=4.2; 95% CI, 1.7 to 9.9), gastrointestinal (OR=1.6; 95% CI, 1.3 to 2.0), and other types (OR=5.3; 95% CI, 3.8 to 7.4) of adverse effects. Although reports of central nervous system adverse effects were more frequent in the comparative trials, this difference was not significant. Including a placebo group in a RCT changes how patients rate the efficacy and adverse effects of their therapy. Our results highlight the need to consider the placebo effect in the design and analyses of clinical trials.