Placebo effects raise some fundamental questions concerning the nature of clinical and research medicine. This Element begins with an overview of the different roles placebos play, followed by a survey of significant studies and the dominant views of placebo mechanisms. It then critically examines the concept of placebo and offers a new definition that avoids the pitfalls of other attempts. The main philosophical lesson is that background medical theories provide the ontology for clinical and research medicine. Because these theories often contain incoherent and arbitrary classifications, the concept of placebo inherits the same messiness. The Element concludes with highlighting some impending challenges for placebo studies.