Upon use, copies the effect of the pill currently held by Isaac. Placebo's recharge time changes upon use, depending on the pill Isaac was holding when he used it.
Notes
The item only costs 10 coins when found in a Shop.
Unknown pills are identified when copied.
Recharge time
This is a list of the following recharge times the item can have, depending on the consumable it mimicked last:
Golden Pills use the recharge time of the pill they mimicked. Recharge time is unaffected by whether or not it was a normal pill or Horse Pill.
Note that because the recharge time is determined after using the pill, Placebo cannot be used as a way to narrow down what type of pill Isaac is holding before he uses it.
Can spawn an unlimited number of Lil' Batteries, allowing unlimited use of another activated item or pill.
One battery is guaranteed to be a Lil' Battery, any additional batteries spawn as Micro Batteries. The item does not recharge upon use.
Placebo + Car Battery: Both batteries are guaranteed to be Lil' Batteries, any additional batteries spawn as Micro Batteries, once again allowing unlimited usage.
IX - The Hermit? can be used to "sell" any and all Lil' Batteries and Micro Batteries for 5 Pennies each, effectively allowing for in instant max of coins, provided you have spawned The Hermit? in another room, or have it in your second slot with Polydactyly.
+ Schoolbag + Blank Card: Effectively an extremely complicated method of producing infinite money.
Book of Virtues: Spawns white wisps on the middle ring. The wisps spawn pills when destroyed. The effects of the wisps and types of pills they spawn is independent from Placebo's charge time and the most recently used pill. Unlike Blank Card and Clear Rune, enemies killed by these wisps' tears do not have a chance to drop pills.
Vurp: Allows pills that normally take 12 rooms for Placebo to charge to be used twice as frequently.
Interactions
Starter Deck: All pills are replaced by cards, rendering Placebo useless.
Starter Deck+Little Baggy: Both cards and pills can be encountered again.
If used with Bethany or Tainted Bethany, using a pill that has a larger charge requirement than Placebo's current will still consume soul or blood charges equal to the difference.
Placebo's recharge time changes upon use, depending on the pill Isaac was holding when he used it. 
Shop.
Hematemesis
Hematemesis
Can spawn an unlimited number of 
Lil' Batteries, allowing unlimited use of another activated item or pill.
Micro Batteries. The item does not recharge upon use.
Car Battery: Both batteries are guaranteed to be 
IX - The Hermit? can be used to "sell" any and all 
Polydactyly.
Schoolbag + 
Blank Card: Effectively an extremely complicated method of producing infinite money.
Sharp Plug: Allows functional invincibility.
The Wafer: Allows for Virtually infinite health.
Book of Virtues: Spawns white wisps on the middle ring. The wisps spawn pills when destroyed. The effects of the wisps and types of pills they spawn is independent from Placebo's charge time and the most recently used pill. Unlike 
Clear Rune, enemies killed by these wisps' tears do not have a chance to drop pills.
Starter Deck: All pills are replaced by cards, rendering Placebo useless.
Little Baggy: Both cards and pills can be encountered again.
Bug!
Bethany or 
Tainted Bethany, using a pill that has a larger charge requirement than Placebo's current will still consume soul or blood charges equal to the difference.
Pill Items 
The Binding of Isaac: Rebirth
