Red spots on the penile shaft most often can be a sign of infection. It can be scabies or a very early fungal infection tinea that starts as a small red papule and enlarges to form a ring shaped lesion. These rashes can some times be also an allergy like manifestation like lichen planus, psoriasis, where people have intense itching and sometimes scaling. These things have to be looked when we are assessing red rash on a penile shaft. It can be because of the external factors like the latex allergy in people who are using a condom or it could be a n irritation reaction in if they used something in that area locally. So the red rashes have to be assessed properly and the treatment depends upon the diagnosis mainly thereafter.
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