Well, even though the price per episode varies wildly in the TV show DVD market, $1/episode is very reasonable given that there's no extra cost of DVD production, packaging, distribution, retail, etc.

Prices for 1/2 hour sitcoms are generally a bit more than $1/episode

For example, prices from amazon:

The Simpsons Season 5 - $32.50 - $1.61/episode
The Simpsons Season 4 - $37.50 - $1.70/episode
Friends Season 9 - $30 - $1.30/episode

Just about every major drug development in the past 15 years has come from the public sector, not the private sector.

Simply not true.

Antibiotics are mostly private sector. You might be implying that drugs that are life preserving don't usually come from the private sectors. There are plenty of good examples of life preserving drugs (antibiotics). There are also plenty of good examples of life-enhancing drugs (omeprezol - Prilosec). Or the combination of the both (silfenildil - Viagra was originally indicated to reduce heart attacks, but it had an interesting side effect).

IT IS NOT CAPTIVE MARKETING!!! Blame foreign governments for the high prices here. They don't allow drug companies to charge for R&D costs.

But there are two sides of the argument here too. Here's an analogy The US may be seen as flying first class. They get from point A to point B but pay a much larger price than those in coach (foreign citizens buying drugs). But if airline companies started charging less for first class and distributing the cost to coach, then fewer people are inclined to pay for coach. There are much fewer people on the plane. The plane never leaves the ground.