With United trailing 2-0 through goals from Leroy Sane and Bernado Silva, Sanchez was introduced to add more pace on the flanks, but he only managed to touch the ball once.
The Chilean is the highest paid player at Manchester, taking home £400,000 a week, but has failed to replicate his form at Arsenal, which led to Jose Mourinho snapping him up.
Alexis Sanchez came on for a total of 12 minutes tonight.
United started the match brightly and went toe-to-toe with City in the first half, but were overpowered in the second half as their rivals claimed a precious victory.
The loss was a big dent in Manchester United's hopes of finishing in the top-four and face a tricky fixture this weekend against Chelsea at home.