Serialization Compliance Mistakes That Can Cost Millions

 

Pharma companies that fail to comply with serialization regulations risk millions in fines, product recalls, and reputational damage. Yet, despite its importance, many companies still make avoidable mistakes that put their operations at risk.

In this article, we’ll explore the most common serialization compliance mistakes, their consequences, and best practices to ensure seamless compliance across global markets.

 

Inaccurate or Incomplete Master Data

 

Why it’s a problem:

Serialization relies on accurate master data, including GTINs, batch numbers, expiration dates, and serial numbers. If any of these elements are incorrect or missing, your products could be rejected by regulatory authorities or trading partners.

 

The cost:

• Product quarantines and supply chain delays
• Potential market withdrawals
• Increased risk of counterfeiting due to incorrect identifiers

 

Best practice:

• Implement strict master data management processes
• Regularly validate data before uploading it to regulatory or partner systems
• Use automated validation tools to detect discrepancies before they escalate

Poor System Integration & Data Exchange Failures

 

Why it’s a problem:

The understanding that serialization is related only to assigning a serial number is wrong. Nowadays, serialization has a more significant role and helps track these serial numbers across the supply chain. If your serialization system doesn’t integrate well with your ERP, warehouse management system, or partner networks, data discrepancies will arise, leading to non-compliance.

 

The cost:

• Disruptions in product shipments
• Fines from regulatory agencies for non-compliance
• Loss of trust from CMOs, 3PLs, and distributors

 

Best practice:

• Choose a serialization solution with seamless API integration
• Regularly test system interoperability with trading partners
• Monitor transaction logs for errors and resolve them proactively

Non-Compliance with Country-Specific Regulations

 

Why it’s a problem:

Global serialization regulations are constantly evolving. The requirements in the EU differ from those in the U.S., Russia, Saudi Arabia, and other markets. Failing to meet country-specific compliance rules can lead to shipment rejections and legal consequences.

 

The cost:

• Product seizure at borders
• Heavy fines and regulatory penalties
• Lost revenue due to delayed market entry

 

Best practice:

• Stay updated on global regulatory changes
• Work with compliance experts or serialization partners with market-specific expertise
• Use a scalable solution that supports multi-country compliance requirements

 

 

Lack of Real-Time Visibility & Reporting

 

Why it’s a problem:

Serialization regulations require companies to submit real-time data to national regulatory systems (e.g., EU Hub, DSCSA, Chestny Znak). If your reporting mechanism fails or is delayed, authorities may flag your company as non-compliant.

 

The cost:

• Regulatory audits and penalties
• Disruptions in product distribution
• Increased operational costs to correct data issues

 

Best practice:

• Automate compliance reporting processes
• Implement real-time monitoring dashboards
• Ensure backup mechanisms for data submission to avoid failures

Ignoring Aggregation & Reconciliation Errors

 

Why it’s a problem:

Serialization alone isn’t enough. Аggregation (linking individual unit serials to case and pallet levels) is crucial in many markets. Errors in aggregation and reconciliation can lead to missing product traceability, resulting in compliance breaches.

 

The cost:

• Inability to track product movement within the supply chain
• Fines for failing to provide accurate aggregation data
• Increased manual rework and operational inefficiencies

 

Best practice:

• Implement automated aggregation at all packaging levels
• Conduct regular reconciliation checks to verify serial number accuracy
• Train personnel on proper aggregation procedures

 

Underestimating the Role of Cloud Security in Serialization

 

Why it’s a problem:

Serialization data is highly sensitive and a target for cyber threats. If your serialization platform lacks robust cloud security, you risk data breaches, manipulation of serial numbers, and non-compliance.

 

The cost:

• Cybersecurity breaches leading to data leaks
• Regulatory penalties for failing to protect patient safety
• Loss of trust from supply chain partners

 

Best practice:

• Use an enterprise-grade, cloud-based serialization platform (e.g., Azure-based solutions)
• Implement multi-factor authentication and encryption for serialization data
• Regularly audit security measures to ensure compliance with evolving cybersecurity regulations

 

The mistakes outlined above can lead to multimillion-dollar losses, but with proactive risk management and the right technology, companies can ensure compliance while enhancing operational efficiency.

 

At SoftGroup, we help pharmaceutical companies navigate the complexities of global serialization with our SATT PLATFORM—a scalable, Azure-based solution designed for full compliance, seamless data exchange, and real-time visibility. Want to ensure serialization compliance without the risks? Contact us today!