To medicate them, you'd need to know what you are dealing with. And without testing, you don't know if the itching is coming from mange, fungal infection, or some other cause. The best thing to do is thoroughly clean any bird or squirrel feeders, try to spread out feeding stations to minimize the contact the squirrels have with each other. They will likely recover from a fungal infection and the fur will grow back in. If it is mange, there isn't much you can do for them.
