I've just used masonry bits for terra cotta and ceramic. My experience is that the bits wear out quickly compared to bits used for drilling metal or wood. It's tedious, but can be done. I've read that putting a piece of duct tape over the back keeps the hole from chipping out, but I've never tried the tape. There is a lot of variation in the hardness of different terra cotta types. I guess depending on what clay is used and how it's processed while being made. Maybe the firing, I don't know. I've done a lot so I can hang pots.
Really hard material to drill
Brown terra cotta. Harder than regular.
Regular, good quality. Easier to drill than above.