An Indian patent appeals board dismissed on Monday Bayer's petition against a government decision to allow a domestic company to sell cheap copycat versions of cancer drug Nexavar, delivering a blow to global drugmakers' monopolies on high-priced medicines.

Last year, the Indian patents office, under a mechanism called "compulsory licence", allowed Natco Pharma to sell generic Nexavar at 8,800 rupees ($160) for a month's dose -- a fraction of Bayer's price of 280,000 rupees.

Bayer challenged this decision with the Intellectual Property Appellate Board (IPAB) in the southern city of Chennai.

Although dismissing the petition, the board did order Natco Pharma to pay a royalty of 7% on sales of generic Nexavar to Bayer, an increase from the 6% royalty that had earlier been set.