diff --git a/moto/iam/models.py b/moto/iam/models.py
index 3e744f6a7..df4fa987c 100644
--- a/moto/iam/models.py
+++ b/moto/iam/models.py
@@ -820,7 +820,7 @@ class IAMBackend(BaseBackend):
         )
         if policy.arn in self.managed_policies:
             raise EntityAlreadyExists(
-                "A policy called {} already exists. Duplicate names are not allowed.".format(
+                "A policy called {0} already exists. Duplicate names are not allowed.".format(
                     policy_name
                 )
             )
diff --git a/tests/test_iam/test_iam.py b/tests/test_iam/test_iam.py
index 5146f891c..61b0d534c 100644
--- a/tests/test_iam/test_iam.py
+++ b/tests/test_iam/test_iam.py
@@ -2071,6 +2071,22 @@ def test_create_role_with_same_name_should_fail():
     )
 
 
+@mock_iam
+def test_create_policy_with_same_name_should_fail():
+    iam = boto3.client("iam", region_name="us-east-1")
+    test_policy_name = str(uuid4())
+    policy = iam.create_policy(PolicyName=test_policy_name, PolicyDocument=MOCK_POLICY)
+    # Create the role again, and verify that it fails
+    with assert_raises(ClientError) as err:
+        iam.create_policy(PolicyName=test_policy_name, PolicyDocument=MOCK_POLICY)
+    err.exception.response["Error"]["Code"].should.equal("EntityAlreadyExists")
+    err.exception.response["Error"]["Message"].should.equal(
+        "A policy called {0} already exists. Duplicate names are not allowed.".format(
+            test_policy_name
+        )
+    )
+
+
 @mock_iam
 def test_create_open_id_connect_provider():
     client = boto3.client("iam", region_name="us-east-1")