While testing new drugs (medicines - the medical term is drug), researchers have to demonstrate many things like the effectiveness of the drug, the drug has no side effects, etc.

To demonstrate that the drug works, the patients are divided into two groups - a trial group and a control group. All patients go through the same routine - meet the doctor, take medicines, etc. However, there is a key difference between the trial and control groups - the patients in the trial group get the real drug; while the patients in the control group get a similar looking pill that doesn't have the required drug - this is the placebo.

Surprisingly, researchers have found that in some cases, both sets of patients benefit from the treatment. The ones in the trial group by taking the drug; and the patients in the control group from the placebo. This is called the placebo effect.

First of all, placebo effect doesn't work for ailments like diabetes treatment, cancer treatment or even blood pressure treatment. It seems to work for ailments like pain management, stress related insomnia, etc.

This result is surprising because the placebo was not supposed to change anything, yet it did.

Back to the question, the placebo doesn't cause any harm. Is it helpful? Not really - researchers attribute the result to the ability of the brain to convince the body that the treatment is working.

References:

https://www.health.harvard.edu/mental-health/the-power-of-the-placebo-effect

https://www.webmd.com/pain-management/what-is-the-placebo-effect#1