The SARS‐CoV‐2 Gamma variant spread rapidly across Brazil, causing substantial infection and death wa ves. We use individual‐level patient records following hospitalisation with suspected or confirmed COVID‐19 to document the extensive shocks in hospital fatality rates that followed Gamma’s spread across 14 state capitals, and in which more than half of hospitalised patients died over sustained time pe riods. We show that extensive fluctuations in COVID‐19 in‐hospital fatality rates also existed prior to Gamma’s detection, and were largely transient after Gamma’s detection, subsiding with hospital d emand. Using a Bayesian fatality rate model, we find that the geo‐graphic and temporal fluctuations in Brazil’s COVID‐19 in‐hospital fatality rates are primarily associated with geo‐graphic inequities and shortages in healthcare c apacity. We project that approximately half of Brazil’s COVID‐19 deaths in hospitals could have been avoided without pre‐pandemic geographic inequities and without pandemic healthcare pressure. Our results suggest that investments in healthcare resources, healthcare optimization, and pandemic preparedness are critical to minimize population wide mortality and morbidity caused by highly trans‐missible and deadly pathogens such as SARS‐CoV‐2, especially in low‐ and middle‐income countries.