chicken pox is specific to humans ONLY.
The scabs you see and red "zits" or pustules are usually a secondary skin infection.
Fleas may be the cause. Have you seen fleas in the last 8 months? No matter if yes or no, are you using Frontline, Advantage, or Comfortis from a veterinarian? (I've had clients bring in on-line frontline and the inner packaging wasn't the same.) Please use a flea preventative from a veterinarian each month to try to help prevent a flea allergy and thus a flare up of skin issues.
I would guess the allergy medicine you are speaking of is a benedryl-like product. That only works in 30% of the cases and won't take away symptoms already present but can delay/diminish further symptoms.
Please see your veterinarian or a veterinary dermatologist. Your dog likely needs an antibiotic. And, since typical amounts of steroid are contraindicated due to previous pancreatitis, I suspect Temaril P would be a good substitute -- about a tenth of the amount of steroid working surrealistically with a benedryl type component to get the benefits of steroids with usually no side effects. Your veterinarian needs to examine your dog in order to find the right meds for the situation.
This is a common condition that can be managed.
I agree with Dr. Mathis, red spots and scabs in dogs are usually due to a bacterial skin infection (less commonly skin mites, fungal infection or autoimmune disease), and oral antibiotics for 3-4 weeks are likely needed. Your veterinarian can do skin scrapings to evaluate for the presence of infection, +/- skin cultures or biopsies if bacteria are not seen, or if the infection does not respond to appropriate antibiotics. Additionally, chronic or recurrent skin infections are due to an underlying problem, such as allergies (food allergy, flea allergy or pollen/dust allergies), skin parasites such as microscopic scabies mites, or hormonal disorders such as a low thyroid. Your dog should be on a good monthly flea control product (Revolution is a good choice since it also kills scabies mites), and if skin infection continues to recur, talk to your veterinarian about senior bloodwork and starting a hypoallergenic diet trial for possible food allergy. Referral to a veterinary dermatologist (www.acvd.org) is always an option for tough cases as well.
Kimberly Coyner DVM DACVD