I don't know about Medifast but I've read on several different forums that people with type 2, who turned to a plant-based diet, were able to reduce their BMI to normal range and not need meds to regulate BG. Fish and chicken are allowed but I think that red meat is forbidden.
Best way to lose weight (and more sustainable as a lifestyle) is low carb or ketogenic diet.
You may lose weight on medifast, but when you go back to regular eating you will most likely regain it.