Ok not sure where you're located but in Australia we have what's called the Queensland Itch, and it's an allergic reaction to small insects biting them and the saliva is what they're reacting to. They run themselves raw and it's horrible to watch. Best thing is either move the horse away from coastal areas and out west, treat the symptoms by washing you horse in tea tree oil and skin soothing solutions, and preventing the bites with rugs (buy many a small they will keep ripping them), also putting checicles such as Permoxin works and some people use supplements such as Think fly in their feed which apparnetly helps. Also citronella sprays are good too.
This sounds like sweet itch? Especially if it's concentrated around the mane or dock of the tail. Sweet itch is an allergic reaction to flies.
There are loads of products that help such as washes or sprays. You could spray with fly repellent, add garlic to feed, invest in a fly rug or if possible leave them out at night and in during the day.