Antonio Egas Moniz, a Portuguese neurologist, had developed prefrontal leucotomy, a procedure that cut connections inside the frontal lobes to calm patients with severe mental illness, and reported it as safe and effective in his own case series.
The committee accepted Moniz's reports largely at face value. Independent follow-up later found that many of his patients had been left apathetic, emotionally flat, or significantly impaired, side effects his own publications had understated. Tens of thousands of lobotomies followed worldwide over the next decade, performed on the strength of a Nobel-endorsed method.
The arrival of chlorpromazine and other drugs in the 1950s gave psychiatry a less destructive option, and lobotomy rates collapsed. Decades later, a fellow Nobel laureate, Torsten Wiesel, called the 1949 award "a terrible mistake that caused permanent damage to thousands of patients," a judgment the Nobel committee has never formally reversed.

Read the original study
Tan and Yip, Singapore Medical Journal, 2014 · doi.org/10.11622/smedj.2014048
The prize outlived the procedure's reputation.
Source
- Tan, S., & Yip, A. (2014). António Egas Moniz (1874–1955): Lobotomy pioneer and Nobel laureate. Singapore Medical Journal, 55(4). https://doi.org/10.11622/smedj.2014048