Do I have to take the sugar pills on the last week?
You don't have to take the sugar pills, but they keep you in the habit of taking your medication every day.
You can also skip the sugar pills and go onto a new pack to completely skip your period. However, this should only be done under the direction of your physician because generally, it is healthy for your body to bleed at least three to four times a year.
One reason people don't skip the sugar pills and go through menstruation is as a confirmation that their birth control is indeed working. (ie, if you stop taking the pill, and you don't have your period, you may be pregnant) While this is not a foolproof way to confirm the efficacy of your birth control, it certainly is practical. (It's actually possible to have your period and still be pregnant, but this very rarely happens.)
It's important to know that you should only skip the inactive pills if you are taking monophasic birth control pills. (This just means that each of the pills that you're taking has an equal amount of the active ingredients in each of them. Some birth control pills work by increasing the estrogen week by week, so you shouldn't skip your period if you're on this type of pill.) Examples of monophasics include Alesse, Brevicon, Demulen, Desogen, Genora, Levlen, Levlite, Loestrin, Lo/Ovral, ModiCon, Necon, Nordette, Norethin, Norinyl, Ortho-Cyclen, Ortho-Novum, Ovcon, Ovral, Portia and Zovia.Check with your doctor to see how long you should/can skip inactive pills.
Some gynocologists recommend taking inactive pills once every 3-4 months (which means you'd have your "period" 3-4 times a year).