It could indeed be that the area is being kept wet by licking,it needs to be kept dry, how is it doing now ?
It's hard for a kid to leave it alone, when he has a rough patch he can touch with his tongue. It becomes habitual. Maybe along with the cream or balm, you could use something that are designed to taste bad (there are products made for thumb-suckers that are bitter), to remind him not to lick over his lip no matter how habitual it is. Have you been prescribed a cream like Locorten? That's pretty good for eczema, though you would not want to have him on it constantly.