The Chilean has only one year left on his current deal with the Gunners, and the latest report from the Mirror claims that he has demanded a new deal worth £400,000-a-week wages from the North London club.
"What Sanchez is demanding, that's the going rate because he can get that elsewhere," the Murphy told talkSPORT.
"The simple equation is this: £400,000-a-week is £20m a year, over four years that's £80m.
"To sign a player to take his place, it's going to cost you at least £60m or £70m, and that's if you can find one.
"But Arsenal can't replace Sanchez with someone of his quality, because someone that good won't go there."