Im sorry to hear this bro. My daughter is 6 she tells me all the time about kids teasing other kids at school. It pisses me off! I blame parents for it. thank god my daughter has a heart and plays with and sticks up for the kids that get picked on. However for your sisters skin condition there is a soap and lotion that we use for my son (he has the same thing) its called cetaphil ( may have spelled it wrong) it works great on him. Its a little expensive but worth it. My advice is just encourage her. Maybe talk to the teacher or principal. I had to do that last year. Good luck man hope your sis gets over this soon. She is to young to be going through this crap.