Zverev, who came into the match with a poor recent record against the American after losing their previous six meetings, lost 6-7(4), 6-4, 7-5 in a contest lasting two hours and 39 minutes.
"I had huge problems with the sugar because the sensor I use gave me a completely incorrect reading. It indicated very high values when they were actually low, so I injected much more insulin than I should have," the world number three said after the match.
"During the match, or rather during the first 45 minutes, I had to consume about 350 grams of sugar. I felt absolutely terrible."
Despite the setback, Zverev said Fritz deserved the victory.
"Nevertheless, I fought, gave it my all, and in the end, it must also be acknowledged that Taylor (Fritz) deserved the win. He played better than me today."
The German, who was diagnosed with Type 1 diabetes at the age of four, uses Medtronic technology to help regulate his glucose levels and support his diabetes management on and off the court.
"This is the first time something like this has happened to me. I've been using these sensors since 2016 or 2017, and in nine years, I had never seen such a big error," he said.
Zverev added that the issue was not a concern ahead of Wimbledon, which runs from June 29 to July 12.