This is a tough question because I am unfamiliar with treatment while being incarcerated. I would suggest having that person be checked out by a medical professional outside of the prison facility if at all possible. If not there might be a medical professional who can be brought in by that facility to further review the situation.
A dermatologist should be consulted. They'll be able to tell you what it is and how it should be treated. I've found that Endos are good for Diabetes itself, but for side effect skin disorder treatment, a dermatologist is where they'll refer you.
WAK is right; there are known skin conditions that can be a complication of diabetes. Here are a couple of websites with some information -- and I warn our readers -- the second one has some rather graphic images of skin problems. The pictures might help narrow down what, if any, diabetic complication your friend is suffering from. However, the only sure way to determine what your friend has is for him to be evaluated by a qualified physician.
http://www.diabetes.org.uk/infocentre/inform/necro.htm
http://www.telemedicine.org/dm/dmupdate.htm
I am not a physician, but the mom of a type one diabetic. I have heard of a skin condition related to type one diabetes that is similar to what you described. I would suggest that you see if this person could be seen, by an endocrinologist or dermatologist. Since the person is incarcerated you might need a lawyer to get the right type of doctor to see the person.