One group is given a newly developed medication X, and the other group placebo. If X has noticeable side effects, like extra sleepiness, change in appetite, tremors, etc, wouldn't the participates in group 1 realize that they're given the real medication? How would it affect the study?
If a drug produces noticeable side effects, it is likely that studies will suffer from an unblinding effect which will cause overstatement of efficacy of the drug. This is because in a properly blinded study, the placebo effect is the same* for both the active drug and the placebo, so we can calculate the true efficacy by subtracting*. Unblinding causes the placebo effect to increase in the treatment group (due to increased certainty that they're receiving the active drug).
Surveys could be done of patient and provider so you could verify the validity of the blinding using the correlation between the patient taking the drug and belief that the patient is taking the drug.
Neither of those things are commonly done.