In recent years, several authors have argued that placebo-controlled trials are invariably unethical when known effective therapy is available for the condition being studied, regardless of the condition or the consequences of deferring treatment. Some have also disputed the value of placebo-controlled trials in such a setting, asserting that the comparison of new treatment with old treatment is sufficient to establish efficacy and is all that should be of interest. This article considers the ethical concerns about use of placebo controls and describes the limited ability of active-control equivalence (also known as noninferiority) trials to establish efficacy of new therapies in many medical contexts. The authors conclude that placebo-controlled trials are not uniformly unethical when known effective therapies are available; rather, their acceptability is determined by whether the patient will be harmed by deferral of therapy. If patients are not harmed, such trials can ethically be carried out. Furthermore, active-control trials, although valuable, informative, and appropriate in many circumstances, often cannot provide reliable evidence of the effectiveness of a new therapy.