I can't say Palle would still be my favourite character, even if he did get a little bit over his arrogance and ego. It would be for the best if he and Falma didn't live in the same city. Who knows how much of Palle's nasty attitude was due to his impending doom, which he realised, but it can't be all of it. Even now it seems difficult for him to accept Falma is just better than he and Palle is pretty childish about it, to boot. He definitely shows signs of not healthy but toxic competitiveness. At least he does have a bit of saving grace in his old attempts to make Falma stronger and worth the family name, before Falma surpassed his wildest dreams on his own (though Falma is technically not Falma anymore, but that's his own private secret). All in all, it would be better if Palle lived in another city, far from the capital and was the best pharmacist/physician over there.