Sanchez, who is hoping to defend his Olympic title at London Games later this month, hit the ground at high speed about 100 kilometres (62 mph) before the finish of the eighth stage in the Swiss mountains on Sunday. He could not get back on his bike after the fall.
A tearful Sanchez sat on the ground, clutching his left shoulder and arm, as medical teams tended to him.
He was placed on a stretcher and taken away in an ambulance.
The 157.5-kilometre (98-mile) ride on Sunday from Belfort to the Swiss town of Porrentruy features seven climbs — two of them super-steep.