Background Irrational prescription of drugs can lead to high cost of treatment thus limiting access to essential medicines. We assessed the affordability and appropriateness of prescriptions written for diabetic patients in Eastern Uganda. Methods We collected secondary data from the health management information system registers of patients who attended the outpatient medical clinic at Mbale regional referral hospital from January 2019 to December 2019. The average cost of the prescriptions was calculated and adjusted odds ratios for predictors for unaffordability estimated using logistic regression. Computed scores for indicators of rational drug prescription were used to assess the extent of rational prescribing. Results The median cost per prescription was USD 11.34 (IQR 8.1, 20.2). Majority of the diabetic patients (n = 2462; 94.3%, 95% CI: 93.3-95.1%) could not afford the prescribed drugs. Predictors for unaffordability were if a prescription contained: [greater than or equal to] 4 medicines (AOR = 12.45; 95% CI: 3.9-39.7); an injectable (AOR = 5.47; 95%CI: 1.47-20.32) and a diagnosis of diabetes mellitus with other comorbidities (AOR = 3.36; 95%CI: 1.95-5.78). Having no antidiabetic drug prescribed was protective for non-affordability (AOR = 0.38; 95%CI: 0.24-0.61). The average number of drugs per prescription was 2.8. The percentage prescription of drugs by generic name and from the essential medicine and health supplies list of Uganda were (6160/7461; 82.6%, 96% CI: 81.7%-83.4%) and (6092/7461; 81.7%, 95% CI: 80.8%-82.5%) respectively against WHO standard of 100%. Conclusion The majority of diabetic patients (94.3%) in Eastern Uganda cannot afford to buy prescribed medicines. The government should therefore ensure that essential medicines are readily accessible in public health facilities.