Ok, I emailed Paula's Choice asking if they had any products that might help and this is their reply:
You have indicated that you are looking for products to address hyperpigmentation and dryness on the knees. We hope the following information proves useful:
Causes of hyperpigmentation:
Skin pigmentation problems occur because the body produces either too much or too little melanin. This faulty melanin production is primarily caused by chronic unprotected sun exposure or hormones (particularly during pregnancy or from taking birth control pills).
Advice:
The consistent use of a broad spectrum sunscreen with a minimum of SPF25 is essential. Diligent use of a sunscreen alone allows some repair as well as protection from further sun damage if your knees / legs are always exposed.
Furthermore, the use of an AHA exfoliant in combination with other treatments can be very effective for improving the overall appearance of skin and possibly help other ingredients penetrate better into the skin.
AHA products with a concentration of 4 to 10% do not directly reduce skin discolorations. However, it has been proven that they can be very effective in combination with other skin brightening treatments in the repair of hyperpigmentation and skin damage caused by the sun as they gently remove dead skin cells from the skin surface.
We recommend using the Resist Skin Revealing Body Lotion with 10% AHA.
An AHA product may increase your skin's sensitivity to the sun and particularly the possibility of sunburn. While using an AHA exfoliant, wear protective clothing, limit sun exposure and use a sunscreen with a minimum of SPF25 to protect your skin.
Paula's Choice products that help improve hyperpigmentation:
Resist Pure Radiance Skin Brightening Treatment: Allows darker, discolored spots to become more even with the surrounding skin. This product is actually a facial product, therefore, the amount is not the same as body products.
Resist Retinol Body Treatment: Utilizes a specialized retinol complex, potent antioxidants, and skin-repairing ingredients to intensively smooth, moisturizer skin and improve skin's tone.
Also:
Body Moisturizer: Clinical Body Butter: Massage over dry areas (elbows, heels, knees, and anywhere you want to seal in moisture to soften skin) as often as needed. Excellent when used after applying an AHA or BHA exfoliant to enhance softness and healing.
You might also want to consider any prescription treatment recommended by your doctor.