I'm with meller,What is he hosting in? Do you have soft corals/LPS in your tank?
Looks to me like he's been trying to host in a coral, which can result In discoloration of the skin. Usually disappears on its own when they either adapt or stop hosting in corals ;)
Antibiotic??? Tea Tree Oil/Cajeput Oil I thought.Melafix is a mild anitbiotic for treating bacterial infections - whilst I am not sure what the problem is with your fish, it doesn't look bacterial to me. Until you can identify the problem I wouldn't be dosing any medications in the hope that it might work.
Does the fish appear to be in any discomfort?