The sugar pills are just that: Just sugar, or another inert material.
These pills contain no horomones, and thus, do nothing for your body. The lack of horomones is what causes your "period", which is actually just withdraw bleeding, caused by the lack of hormones.
You will not ovulate during this week, thus you are still safe.
You don't have to take the pills since they don't contain any active ingredients. You will be safe either way. I personally don't take my placebo (sugar) pills either.
The sugar pills are just there to remind you to take a pill every single day and keep you in the habit of doing so.