How old is your cat, and was he also diagnosed with Chronic Kidney Disease? K/D is the prescription diet for
kidney disease, and is completely inappropriate for a cat unless the cat is in end stage renal failure. That's because K/D has extremely low protein levels--when fed long term, it causes muscle wasting which is more dehabilitating than the actual kidney disease. The dry K/D is extremely high in carbs and absolutely should not be fed to diabetic cat. Definitely return it to your vet for a refund--you can always say your cat wouldn't eat it. Since K/D tastes pretty awful to most cats, that's completely believable and you should have no problems getting a refund.
It's also important to note that blood glucose levels can raise significantly at the vet, so it's important that you test blood glucose levels at home. Most of us use human glucose meters. One popular one here is the Relion Confirm (or Micro) from Walmart, because it's inexpensive and reliable.
Your vet may try to give you a different prescription diet; these are all over priced and not good for your cat. Hills makes no food that is appropriate for a diabetic, and they make a ton of money charging obscene prices for pretty much the lowest quality ingredients you can find in cat food. Remember that your vet also makes money on prescription diets, so it may not always be in your best interest to feed one.
If your cat does have kidney disease in conjunction with the diabeties, there are many low carb, canned commercial foods that are good for both conditions. You just need a high quality protein, low phosphorus, low carb food. If this is the case, I can give you several good suggestions that shouldn't break your bank.
If your cat's blood glucose levels are still high after a week or so of a low carb, canned diet, it's important that you start insulin right away. The two best insulins for cats are Lantus (glargine) and Levemir (detemir), but Prozinc is also an acceptable insulin. The sooner you start insulin therapy, the sooner and more likely it is that your cat will go into remission and not need insulin anymore.