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Objective: To estimate the direct cost and its determinants in type2 diabetic patients visiting outpatient department of private tertiary care hospitals. Study Design: A descriptive cross sectional study. Place and Duration of Study: This research was carried out in the diabetic outpatient department of Shifa international hospital and Ali medical Centre from 15 November 2014 to 15 February 2014. Materials and Methods: The descriptive cross sectional study was conducted on 108 diabetic patients (male 52%, female 54 %). By employing simple random sampling technique the data was collected from patients having diabetes from at least 5 years, with age limit between 30 to 80 years, with or without having complications through pretested interview administered questionnaire. The structured questionnaire was used for collecting data. SPSS 20.0 was used for data analysis. The percentages and frequencies were drawn in order to draw the results. Results: The results showed that the average direct cost spent by a patient was 7704 PKR per month. More than half (66.7%) of the study subjects have suffered from diabetes since 5‐10years. A larger group of respondents (50%) was treating diabetes with oral hypoglycemic. Medication, consultation, and lab investigation charges were the main determinants of diabetic cost. Per month medication charges were 3997 PKR, followed by lab investigation charges of 2441PKR per visit and consultation cost was 1298 PKR. Most of the patients (86.1%) were having one complication due to diabetes. The cost of treatment increased with the increasing age and morbidities. Conclusion: Diabetes is very expensive disease to manage. The affluent charges of managing diabetes and its day by day increased cases will put tremendous burden on the society.