Lanolin is fine, but can be a bit expensive. Keep the water going so you know it's not dehydration causing the problem, and then coat her lips with plain old petroleum jelly. It seals the moisture in, and although it's technically not edible, a little (even if she licks it off multiple times a day) won't hurt your daughter at all. I'm actually allergic to most lip- and chapsticks, so I've been using petroleum jelly myself for years! You can even buy the little tubes to carry in your purse for her. Apply often, keep her drinking, and you should see a real improvement. Good luck!