Hi, I can understand your concern for the raised, itchy white scab inside of arm which turned red when picked. It appears form your query that you have developed ingrown hair at the arm region. This area is quite common to get infected very easily because of sweating and high bacterial proliferation. I suggest you to take oral antibiotic such as ciprofloxacin or cefadroxyl 500 mg two times a day for 5 days to prevent secondary infection. For time being period you can apply antibiotic cream such as fucidin or mupirocin and take pain killer tablets such diclofenac or paracetamol. Do not try to even touch or pinch the area as can cause more aggravation of the problem and spread of the infection. Take care.