The Escalator problem as an example of Simpson's Paradox

An interesting point. From The Prescription Escalator by Alex Tabarrok.

Ask anyone and they will tell you that their prescription costs are rising. But generic drug prices are falling (also here) and generics are 80-90 percent of all prescriptions. Moreover, although branded drugs are expensive total out-of-pocket costs for the population as a whole are flat or even decreasing as Michael Mandel points out:

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So are people simply mistaken about what they are experiencing? Not quite. Mandel uses the metaphor of the prescription escalator to explain the apparent paradox:

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In other words, every individual experiences an increase in prescription costs as they age even though for the population as a whole prescription prices are flat or falling–a form of Simpson’s paradox. The driver of higher costs is usage not price. People aged 65-74 have on average 25 (!) prescriptions to fill, more than two and half times as many as people aged 25-34 (about 9 per year).

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Understanding the prescription escalator is important because regulating drug prices–aside from being a bad idea–won’t solve the perceived problem.