Does Judaism allow placebos where the person thinks it does something, and is thereby cured, even though the item does nothing?
Is this gnevas da'as (or some other issur), or because it can help them it's permitted to mislead them this way.
Nishmat Avraham writes on this (vol 2, p.12)
PS. As a reminder the author, Dr. Abraham S. Abraham, is a leading physician in Israel. He doesn't address "the law of the land" in his response