I have run into this problem frequently in the past. Although I don't believe there is any one miracle cure, but I definitely agree with whom ever posted the details of deworming, sheath cleaning, and a good scrubbing. I have heard multiple ideas, some of which are to use Gold Bond foot powder, after bathing the tail. But it is an everyday treatment. Other people have used stuff called Calm Coat, and other products anything with Tea Tree oil. But I have also heard of some stuff called Shaply's MTG. I have never used it, however one of my mares gets a mild case of sweet itch on her chest and shoulders so I am intending to try that this year. I have heard good things about it. My mothers Mustang mare gets little itchy patches on her face and body and she reponds very well to the MTG.
I also wonder if you could use some of the cooling spray that is on the market for humans for stings, bites, and rashes. I think I saw some sort of airesol spray for this purpose that could probably work very well I would think. However I have not tried any
My vets answer was to put my mare on steroids (dexamethazone) but steroids are so risky over prolonged use, and can cause founder in even the healthiest of horses so I opted out on that one.
But definitely make sure that it isn't a problem with worms etc. otherwise all other treatments will be futile. However if it is a skin issue or an allergic reaction to something like bugs try to use one of these products and definitely review things with your vet.