Although the placebo effect is known to have a strong impact on the outcomes of clinical trials, methods for measuring it are limited to physiological observations. We propose a method of localizing, identifying and measuring placebo and treatment-induced networks in the brain using functional neuroimaging. Measuring the relative activation of these “placebo” brain networks serves as a proxy for the placebo effect contained within the variable of interest (depression rating, blood pressure, etc). Analogous to the difference between a paired and unpaired t-test, this allows for a sharp gain in power and reduction in the sample sizes needed in clinical trials, potentially leading to a drastically smaller sample sizes for establishing efficacy, a shorter time-to-market for a drug, and a drastic reduction in the cost of bringing new drugs into the market.