Wired has an excellent article on the increasing effectiveness of placebos. It seems that this increase is correlated with the lifting of the ban on direct-to-consumer marketing of drugs by the FDA in 1997.
Other research is focused on determining how placebos work. In one study, researchers were able to see parts of the placebo effect in action in the spine by telling participants that they were trying out a new painkilling cream against a non-painkilling cream (both creams were inactive). While the exact mechanism needs further investigation, this was the first step towards demonstrating the participation of the spine in the placebo effect.
Placebos Are Getting More Effective at Wired for the full article.
Placebos trigger an opioid hit in the brain at New Scientist for a brief discussion of the real effects that placebos have (i.e. generating chemicals in our bodies).
The Dilute Homeopathy for an example of a very expensive placebo.
- See The magic of the placebo at TED for a video of a magician explaining the placebo effect and using the same principle to perform a magic trick.